The Relevant Range Concept Is Applicable to Mixed Costs

question 325

True/False

The relevant range concept is applicable to mixed costs.

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Definitions:

Direct Labor Quantity Variance

This refers to the difference between the actual labor hours worked and the standard labor hours that should have been worked for the actual level of production, multiplied by the standard hourly wage rate.

Direct Labor Cost

The expense incurred by a company for wages, benefits, and other costs for employees who work directly on the manufacturing of products.

Produced

Refers to the quantity of goods or services created by a company during a specific time period.

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on a specified activity base.