When the Actual Output Is More Than Expected and the Volume

question 138

Multiple Choice

When the actual output is more than expected and the volume is unusually high then the production volume variance is

• A)unfavourable and should be prorated to work-in-process inventory, finished goods inventory, and cost of goods sold.
• B)unfavourable and should be charged to cost of goods sold.
• C)favourable and should be offset against cost of goods sold.
• D)unfavourable and should be applied to inventory.
• E)favourable and should be applied to inventory.

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Definitions:

Adhocracy

A selectively decentralized form of organization that emphasizes the support staff and mutual adjustment among people.

Adhocracy

An organizational structure that is flexible, non-hierarchical, and adaptable, often employed to spur innovation and adapt quickly to changes.

Centralization

The process of concentrating control and decision-making authority within a centralized group or location, often at the top levels of organizational hierarchy.

Supervision

The act of overseeing or managing others' work to ensure it meets required standards and objectives.