If Variances Show That the Operations Are Better Than Expected

question 30

True/False

If variances show that the operations are better than expected the appropriate management action is to continue monitoring to ensure it is maintained and modify future operating plans accordingly.

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Definitions:

Factory Overhead

All indirect costs related to the production process, such as utilities, maintenance, and supervision, not directly tied to specific units produced.

Factory Burden

Another term for manufacturing overhead, encompassing all indirect costs involved in operating a factory, excluding direct materials and labor costs.

Surplus

The amount by which a company's income exceeds its spending, or in a broader sense, an excess of assets over liabilities.

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished products.