The Sum of the Variable Overhead Spending Variance, the Variable

question 123

Multiple Choice

The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the:

• A) Production variance.
• B) Quantity variance.
• C) Volume variance.
• D) Price variance.
• E) Controllable variance.

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Definitions:

Variable Cost

Expenses that change in proportion to the production level or the amount of output.

Period Cost

Period cost refers to any cost that is not directly tied to the production of goods and is expensed in the accounting period in which it is incurred, such as selling, general, and administrative expenses.

Product Cost

The total cost incurred to create a product, including direct labor, direct materials, and manufacturing overhead.

Marketing Department

A division within a company that focuses on strategies and tactics to promote products or services to the target audience.