Use the Information Below to Answer the Following Question(s)

question 74

Multiple Choice

Use the information below to answer the following question(s) .Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-The relevant range is important because

• A)it specifies which costs should be used for a given decision.
• B)it provides a basis for determining a range of acceptable cost alternatives.
• C)it is required to determine inventoriable costs under ASPE/IFRS.
• D)it specifies the limits beyond which the relationship of cost to cost drivers may not be valid.
• E)it determines the time horizon.

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Definitions:

Total Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected (budgeted) variable overhead costs based on actual production levels.

Variable Overhead Efficiency Variance

The difference between the standard cost of variable overheads allocated for production and the actual cost incurred.

Supplies Cost

The expense associated with acquiring supplies necessary for the operation of a business, such as office supplies or manufacturing inputs.

Variable Manufacturing Overhead

Indirect manufacturing costs that change in total in direct proportion to changes in production volume, such as utilities or materials.