A Company May Set Predetermined Overhead Rates Based on Normal,expected

question 59

Multiple Choice

A company may set predetermined overhead rates based on normal,expected annual,or theoretical capacity.At the end of a period,the fixed overhead spending variance would

• A)be the same regardless of the capacity level selected.
• B)be the largest if theoretical capacity had been selected.
• C)be the smallest if theoretical capacity had been selected.
• D)not occur if actual capacity were the same as the capacity level selected.

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Definitions:

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