When There Is a Difference Between the Actual and the Standard

question 139

Multiple Choice

When there is a difference between the actual and the standard capacity,which of the following,based solely on fixed overhead,occurs:

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

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Definitions:

Operating Leverage

A financial ratio that measures the degree to which a company can increase operating income by increasing revenue.

CVP Graph

A graphical depiction of the Cost-Volume-Profit analysis, showing how a company's profits, costs, and sales volume are related.

Break-even Point

The level of production or sales at which total revenues equal total expenses, with no net loss or gain.

Total Sales Revenue

The overall income generated from selling goods or services before any expenses are subtracted.