Manufacturing Companies Using a Standard Cost System Often Can Achieve

question 136

Multiple Choice

Manufacturing companies using a standard cost system often can achieve more effective control when factory overhead variance analysis is done with:

• A) A two-variance approach.
• B) A three-variance approach.
• C) A four-variance approach.
• D) A single cost driver.
• E) Multiple cost drivers.

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Definitions:

Non-volume Driven

Pertains to costs that do not change with the level of production or service volume.

Product Costing System

An accounting methodology used to ascertain the total production cost of a product, by adding together the costs of direct materials, direct labor, and manufacturing overheads.

Bids Won

The number of proposals or offers accepted by clients or customers, indicating successful sales or project initiations.

Activity-based System Accuracy

Activity-based system accuracy refers to the precision with which an activity-based costing system allocates overhead costs to products or services based on the actual activities undertaken.