Costs Incurred Regardless of the Number of Units of a Product

question 222

Multiple Choice

Costs incurred regardless of the number of units of a product that are produced or sold are called:

• A)controllable costs.
• B)fixed costs.
• C)mixed costs.
• D)variable costs.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting practices.

Direct Labor-Hours

The combined hours worked by staff directly partaking in the manufacturing activities.

Standard Hours Allowed

The amount of work hours allocated for the completion of a specific task, based on standard performance.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost, indicating how material cost fluctuations affect production costs.