Indicate Whether Each of the Following Statements Is True or False.The

question 138

Short Answer

Indicate whether each of the following statements is true or false.The difference between the actual fixed costs and budgeted fixed costs is the spending variance.For fixed costs, there is no flexible budget variance.While total fixed cost does not change in response to changes in the volume of activity, fixed cost per unit does change.To monitor the effects of volume on fixed cost per unit, companies calculate a fixed cost volume variance.The fixed cost volume variance is favorable if actual volume is less than planned because cost per unit is higher than expected.

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Definitions:

Diminishing Returns

A principle stating that if one factor of production is increased while other factors are held constant, the incremental increases in output will eventually decrease.

Labor

The human effort, physical or mental, used in the production of goods and services.

Marginal Product

Marginal Product is the additional output resulting from the use of one more unit of a production input, holding all other inputs constant.

Units of Output

The quantities of a good or service produced by a firm or economy.