The Difference Between Actual Variable Overhead and Budgeted Variable Overhead

question 21

True/False

The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead spending variance.

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Definitions:

Risk

The potential for losses or less-than-expected returns, present in all types of investments and business activities.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.

Investing Activities

Activities involving the buying and selling of long-term assets and investments, excluding those considered as cash equivalents.

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of an entity, often reflected on the cash flow statement.