Assuming That the Standard Fixed Overhead Rate Is Based on Full

question 127

Multiple Choice

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the

• A) fixed factory overhead volume variance
• B) direct labor time variance
• C) direct labor rate variance
• D) variable factory overhead controllable variance

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Definitions:

Direct Labour

The wages paid to workers who are directly involved in the production of goods or the provision of services.

Raw Materials

Raw materials are basic and unprocessed inputs used in the manufacturing of goods.

Manufacturing Overhead

Indirect manufacturing costs such as the expenses for factory maintenance and equipment depreciation.

Raw Materials Used

The total value of all raw materials consumed in the production process over a specified period.