When There Is a Standard Batch Size for Production Activity

question 134

Multiple Choice

When there is a standard batch size for production activity:

• A) A modification of the traditional approach to constructing the flexible budget for control purposes allows for a more detailed analysis of batch-related overhead costs.
• B) It is not possible to construct a flexible budget for cost-control purposes.
• C) Standard cost variances for only the variable portion of batch-related manufacturing overhead costs can be calculated.
• D) The variable portion of the total flexible-budget variance for batch-related costs can be further decomposed into a spending and a volume variance, which leads to better cost control.

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Definitions:

Quadrant C

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