A Favorable Fixed Overhead Spending Variance Might Indicate That

question 91

Multiple Choice

A favorable fixed overhead spending variance might indicate that:

• A)more capacity was used than planned
• B)the denominator level was less than planned
• C)the fixed overhead cost-allocation base was not used efficiently
• D)a plant expansion did not proceed as originally planned

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Definitions:

Normal Goods

Goods for which demand increases as the income of consumers increases and vice versa, showing a direct relationship between income and demand.

Demand Schedule

A list or table showing how much of a good or service consumers will want to buy at different prices.

Elasticity

The degree to which the demand or supply of a product responds to changes in price or other factors, indicating how adjustments in price can influence market dynamics.

Income Elasticity

A measure of how much the demand for a good will change in response to a change in consumers' income.