The Capacity Variance Is Composed of the Unused Capacity Variance

question 138

Multiple Choice

The capacity variance is composed of the unused capacity variance and

• A)the activity volume variance.
• B)the used capacity variance.
• C)the activity benchmark.
• D)the value-added standard.

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Definitions:

Additional Paid-In Capital

Additional Paid-In Capital refers to the amount of money paid by investors for shares of stock above the par value of the shares, representing excess received from shareholders over the basic stock value.

Book Value

The net value of a company's assets, determined by subtracting its liabilities from its total assets, often used to assess the company's worth.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential for dividends.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.