The Overhead Volume Variance

question 10

Multiple Choice

The overhead volume variance:

• A)captures the difference between planned overheads and actual overheads
• B)measures underutilized capacity
• C)measures the opportunity cost of actual capacity utilization differing from planned capacity utilization
• D)as a performance measure encourages overproduction
• E)All of the choices are correct

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Definitions:

Aging Schedule

A table or report that displays the balances owed to a company by its customers, broken down into categories based on the length of time the invoices have been outstanding.

Average Collection Period

The average collection period is the amount of time it takes for a business to receive payments owed by its clients in relation to its accounts receivable.

Accounts Receivable Balance

Accounts receivable balance is the total amount of money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Payment Collections

The process of gathering payments or receivables from clients or customers.