Assume That Variable Overhead Is Over Applied by $100 and Fixed

question 127

Multiple Choice

Assume that variable overhead is over applied by $100 and fixed overhead is under applied by $50.The effect on cost of goods sold is

• A)$150 increase.
• B)$150 decrease.
• C)$50 increase.
• D)$50 decrease.

---

Definitions:

Activity Variances

The differences between the expected costs of activities and the actual costs, used in managerial accounting to analyze performance.

Meals Served

The total number of meals prepared and provided to customers over a given period, often used in the hospitality or restaurant industry as a performance metric.

Cost Drivers

Factors that cause a change in the cost of an activity, such as machine-hours or labor hours, influencing direct and indirect costs.

Guests

Individuals invited to partake or be present in an event, establishment, or locale.