Factors Contributing to the Fixed Factory Overhead Spending Variance Can

question 24

Multiple Choice

Factors contributing to the fixed factory overhead spending variance can include all the following except:

• A) Inaccurate budget estimates for these costs.
• B) Inadequate control of fixed overhead costs.
• C) Misclassification of cost items by the accounting system.
• D) Operating inefficiency.
• E) Unanticipated increases in costs such as factory insurance.

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Definitions:

Perfect Competitor

A theoretical market structure in which many firms sell identical products, and there are no barriers to entry or exit, leading to optimal price and output levels.

Restricts Output

A strategy or condition that limits the amount of goods and services produced, often to maintain prices or due to limited resources.

Competitive Industry

An industry where numerous sellers offer products or services that are similar, ensuring no single entity has significant market power to determine prices.

Covert Collusion

An implicit secret agreement between parties to fix prices, divide markets, or rig bids without explicit verbal agreement, making it hard to detect and prosecute.