The Fixed Overhead Cost Variance Measures How Well the Business

question 181

Multiple Choice

The fixed overhead cost variance measures how well the business ________.

• A)keeps costs of variable overhead inputs within standard.
• B)uses its variable overhead inputs.
• C)keeps fixed overhead within standard.
• D)explains why fixed overhead is under allocated or overallocated

---

Definitions:

Condensed Income Statement

A simplified financial statement that summarizes revenues, costs, and expenses to show a company's net income over a specific period.

Discontinuance

The action of stopping the production or sale of a product or service, often as a result of strategic business decisions.

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in a decision-making situation.