For Which of the Following Reasons Does the Volume Variance

question 40

Multiple Choice

For which of the following reasons does the volume variance arise?

• A)Overhead costs incurred were greater or less than the amount budgeted.
• B)The company operated at more or less units of production activity than expected during the period.
• C)Actual activity equaled the volume used to establish the overhead cost per unit.
• D)The company purchased more or less materials for production than the amount used.

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Definitions:

Historic Rate

The exchange rate used to convert foreign currency transactions to the reporting currency at the date of the transaction, for accounting purposes.

Income Statement Items

Elements found in the income statement, including revenues, expenses, gains, and losses, which together determine the net income of a company.

Average Rate

The mean amount at which something can be bought or sold, calculated over a specified period or under certain conditions.

Functional Currency

The primary currency used by a business or unit in its financial statements, reflecting the main economic environment in which it operates.