If the Standard Hours Allowed Are Less Than the Standard

question 98

Multiple Choice

If the standard hours allowed are less than the standard hours at normal capacity

• A) the overhead volume variance will be unfavorable.
• B) variable overhead costs will be underapplied.
• C) the overhead controllable variance will be favorable.
• D) variable overhead costs will be overapplied.

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Definitions:

Normal Balance

Reflects the expected balance orientation (debit for assets and expenses, credit for liabilities, equity, and revenues) of an account in double-entry bookkeeping.

Financial Statement

A written record that conveys the business activities and financial performance of a company, typically including the balance sheet, income statement, and cash flow statement.

Permanent/Temporary

Refers to accounts on a company's balance sheet that are carried over from one accounting period to the next, with permanent indicating long-term accounts and temporary indicating accounts that are closed at the end of each period.

Coal Deposit

A geological formation containing a natural accumulation of coal, which can be mined for use as a fuel.