If the Production Planners Set the Budgeted Machine Hours Standards

question 133

True/False

If the production planners set the budgeted machine hours standards too tight, one could anticipate there would be an unfavorable fixed overhead efficiency variance.

---

Definitions:

Gross Profit

The financial gain achieved after deducting the cost of goods sold from total sales revenue, not including other operating expenses, interest, or taxes.

Decreasing Costs

A situation where a company experiences a reduction in the total cost of production or operation over time, often through economies of scale or improved efficiency.

FIFO

An inventory valuation method where the first items purchased or produced are considered the first sold, standing for First-In, First-Out.

Receiving Report

a document that records the details of goods received from a supplier, used to match against purchase orders and invoices.