When Variable Overhead Efficiency Variance Is Favorable, It Can Be

question 45

Multiple Choice

When variable overhead efficiency variance is favorable, it can be safely assumed that the ________.

• A) actual rate per unit of the cost-allocation base is higher than the budgeted rate
• B) actual quantity of the cost-allocation base used is higher than the budgeted quantity
• C) actual rate per unit of the cost-allocation base is lower than the budgeted rate
• D) actual quantity of the cost-allocation base used is lower than the budgeted quantity

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Definitions:

Land

The surface of the earth not covered by water, recognized as a factor of production in economics, including natural resources and space for activities.

Source of Profit

The origin from which a business or economic activity generates earnings, often through the production of goods, provision of services, or investment activities.

Innovation

An idea that eventually takes the form of new, applied technology or a new production process.

Monopoly Power

The ability of a monopoly to dictate the terms of the market, including price and supply of a good or service, due to the lack of competition.