The Variable Overhead Efficiency Variance Depends on Whether the Quantity

question 104

Multiple Choice

The variable overhead efficiency variance depends on whether the quantity of the cost driver used is more or less than ________.

• A)the standard amount of output for the expected amount of output
• B)the quantity allowed for the expected amount of output
• C)the quantity allowed for the static budget amount of output
• D)the quantity allowed for the actual output

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Definitions:

Safety Stock

Extra inventory held by a business to protect against stockouts due to variability in demand or supply chain disruptions.

Fill Rate

A performance metric that measures the percentage of customer demand that is met without backorders or stockouts.

Replenishment Cycle

The process or time it takes to replenish inventory in a supply chain, from ordering to receiving goods.

Expected Shortage

The anticipated deficiency in quantity or supply of a product or resource relative to the expected demand for that product or resource.