The Total Fixed Overhead Variance Is Obtained by Summing Up

question 136

True/False

The total fixed overhead variance is obtained by summing up variable overhead cost variance and fixed overhead volume variance.

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Definitions:

Current Margin

The existing difference between a company's sales and its variable costs, indicating the portion of sales revenue that covers fixed costs and profits.

Desired Margin

The target profit margin a company aims for in pricing its products or services.

Production Level

the quantity of goods and services produced by a business or economy within a certain period.

Perfectly Elastic

Describes a market condition where demand or supply responds instantaneously to changes in price with an infinite change in quantity demanded or supplied, depicted as a horizontal line in graphical analysis.