There Is No Output-Level Variance for Variable Costing, When ________

question 135

Multiple Choice

There is no output-level variance for variable costing, when ________.

• A) the inventory level decreases during the period
• B) the inventory level increases during the period
• C) fixed manufacturing overhead is allocated to work in process
• D) fixed manufacturing overhead is not allocated to work in process

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Definitions:

Normal Balance

The side of an account, either debit or credit, where increases in the account are recorded.

Net Book Value

The value of an asset after accounting for depreciation or amortization, representing its carrying value on the balance sheet.

Adjusting Journal Entry

An accounting entry made in the books at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.

Supplies Account

An account used to track the cost of supplies consumed by a business during an accounting period.