Assume That Machine Hours Drive the Cost for Overhead

question 58

Multiple Choice

Assume that machine hours drive the cost for overhead. The difference between the actual variable overhead incurred and the applied variable overhead is the:

• A) volume variance.
• B) production variance.
• C) efficiency variance.
• D) sum of the spending and efficiency variances.
• E) spending variance.

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Definitions:

Sales Increase

An upward change in the quantity or value of goods and services sold by a company, indicating growth in revenue.

Units Budgeted

The estimated quantity of units of production or sales that a company plans to achieve during a specific period.

Direct Cost

Expenses that can be directly tied to the production of specific goods or services, such as raw materials and labor.

Cost Object

An item for which costs are measured and assigned, which can include products, services, projects, or customers.