Decomposition Methods Involve Different Procedures That Break Down Previous Company

question 29

True/False

Decomposition methods involve different procedures that break down previous company sales data into four major components: trend, cycle, seasonal, and economic events.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead based on hours worked and the standard cost of variable overhead for the actual hours worked.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the standard costs expected for the actual production level.

Standard Cost

A financial estimate used to set a cost benchmark for manufacturing products, based on expected direct material, direct labor, and overhead costs.

Per Unit

Refers to a measurement or cost attributed to each individual unit of production or purchase.