Which of the Following Variances Is Caused by a Difference

question 143

Multiple Choice

Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

• A) Variable overhead spending variance.
• B) Variable overhead efficiency variance.
• C) Fixed overhead budget variance.
• D) Fixed overhead volume variance.

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Definitions:

Job Order Cost Accounting

A system used to calculate the costs associated with a specific job or order, tracking direct labor, direct materials, and overhead.

Service Business

A type of business that provides intangible products or services to its customers rather than selling physical goods.

Factory Overhead Rate

A calculation used in manufacturing to allocate indirect costs, such as utilities and rent, to individual units of production.

Processing Departments

Divisions or areas within a factory where specific stages of production are completed, often part of a cost accounting system to track expenses and efficiency.