In a Standard Cost System, an Unfavorable Production-Volume Variance Would

question 165

Multiple Choice

In a standard cost system, an unfavorable production-volume variance would result if:

• A) There is an unfavorable labor efficiency variance.
• B) There is an unfavorable labor rate variance.
• C) Actual production is less than the "denominator volume" (that is, the volume level used to establish the fixed overhead application rate).
• D) There is an unfavorable fixed manufacturing overhead spending variance.
• E) Actual fixed overhead costs are greater than budgeted fixed overhead costs.

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Definitions:

Own Contract

Own contract typically refers to an agreement or promise that one has made with oneself, often not legally enforceable but acknowledging personal commitment or obligation.

Bargaining Unit

Employees joined together for the purpose of collective bargaining.

Wage Increase

An upward adjustment in employees' salaries or wages, often due to economic conditions, labor market pressures, or performance.

Union Members

Individuals who belong to a labor union, which is an organization that represents workers' interests in negotiations with employers.