Because Fixed Factory Overhead Cost in Total Does Not Vary

question 45

Multiple Choice

Because fixed factory overhead cost in total does not vary with changes in output:

• A) The amount used in the control budget for a period is a "lump-sum" amount.
• B) There is no way to assign fixed overhead cost to products for product-costing purposes.
• C) Most companies treat such costs as period, rather than as product costs.
• D) There is no justification for fixed overhead cost application.
• E) Generally accepted accounting principles permit companies to use variable rather than absorption (full) costing for external reporting purposes.

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Definitions:

Poly-

A prefix meaning "many" or "multiple," used to describe objects or phenomena that have numerous aspects or parts.

Below

A term used to indicate a lower level or position, or being beneath something else.

Sub-

A prefix meaning below, under, or beneath, often used to form nouns, adjectives, or verbs.

Toward

In the direction of; closer to a particular point or in consideration of.