Unused Capacity Is Considered Wasted Resources and the Result of Poor

question 97

True/False

Unused capacity is considered wasted resources and the result of poor planning.

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Definitions:

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, typically based on hours of labor or machine hours.

Quantity Standard

A predetermined measure of the amount of input that should be used in the production of a single unit of product or service.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected (or standard) amount based on efficient operations.

Standard Costing System

A cost accounting system that uses cost estimates for material, labor, and overhead to calculate a standard cost for products.