Best Operating Level Is Usually a Multiple of the Level

question 34

True/False

Best operating level is usually a multiple of the level of capacity for which a process was designed.

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Definitions:

Direct Materials Purchases Variance

A measure used in managerial accounting to compare the actual cost of direct materials to the expected cost.

Direct Labor-Hours

The cumulative hours put in by workers directly engaged in manufacturing products or delivering services.

Labor Rate Variance

The variance between the real labor costs and the projected or normative labor costs.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on output levels.