In an A-B-C System, the Typical Percentage of the Number

question 161

Multiple Choice

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

• A) 10.
• B) 30.
• C) 50.
• D) 70.
• E) 90.

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Definitions:

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted or expected costs.

Unfavorable

A term used in variance analysis to describe a situation where actual results are worse than expected results, leading to a negative impact on financial performance.

Favorable

A term used in finance and accounting to describe results that are better than expected or budgeted.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated based on estimated overhead costs and an allocation base.