A Fixed-Overhead Volume Variance Would Normally Arise When

question 26

Multiple Choice

A fixed-overhead volume variance would normally arise when:

• A)actual hours of activity coincide with actual units of production.
• B)budgeted fixed overhead is less than (or greater than)applied fixed overhead.
• C)there is a fixed-overhead budget variance.
• D)actual fixed overhead exceeds budgeted fixed overheaD.
• E)there is a variable-overhead efficiency variancE.
• Overapplied overhead can also be the result of a budget variancE.

Understand the significance of operational leverage and its impact.

Understand how managerial options can impact future opportunities.

Grasp the concept of marginal and variable costs in business decision-making.

Learn the foundations of net present value (NPV) and its calculation.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.