Variable Overhead Spending Variances Can Result from Unattainable Variable Allocation

question 120

Multiple Choice

Variable overhead spending variances can result from unattainable variable allocation rates. In turn, those rates may be caused by I. Inappropriate allocation bases
II. Poor estimates of total overhead costs
III. Change in estimated life of depreciable assets

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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Definitions:

Monthly Profit

The net amount of money gained by a business during a one-month period after all expenses have been paid.

Binding Constraint

A constraint in an optimization problem that directly limits the ability to achieve an optimal solution, where any relaxation of the constraint would improve the outcome.

Slack

The amount of time a project task can be delayed without causing a delay to subsequent tasks or the overall project deadline.

Zero

The integer that precedes the positive one and follows the negative one; it is neither negative nor positive.