Which of the Following Is Not a Reason Variable Overhead

question 178

Multiple Choice

Which of the following is not a reason variable overhead costs might differ from the flexible budget costs?

• A)Executives' salaries may increase or decrease.
• B)The prices paid to acquire variable overhead items can increase or decrease.
• C)Variable overhead items can be used more or less efficiently than planned.
• D)Since variable overhead varies with production activity,if the company is less efficient with respect to that production activity,then variable overhead will be used more or less efficiently.

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Definitions:

Direct Method

A cash flow statement preparation approach that lists major categories of gross cash receipts and payments.

Depreciation Expense

The methodical distribution of the expense of a physical asset over its estimated life span.

Prepaid Expenses

Payments made for goods or services to be received in the future; recognized as assets on the balance sheet until the benefit of the goods or services is realized.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the company's financial statements.