Which of the Following Statements About Overhead Variances Is False

question 160

Multiple Choice

Which of the following statements about overhead variances is false?

• A) Standard hours allowed are used in calculating the controllable variance.
• B) Standard hours allowed are used in calculating the volume variance.
• C) The controllable variance pertains solely to fixed costs.
• D) The total overhead variance pertains to both variable and fixed costs.

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Definitions:

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value.

Market Rate

The prevailing interest rate available in the marketplace for investments of a similar nature and risk.

Premium

The amount by which the price of a financial instrument or commodity exceeds its face value or market value respectively.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the price paid for the use of a lender's money.