When Machine-Hours Are Used as an Overhead Cost-Allocation Base,the MOST

question 110

Multiple Choice

When machine-hours are used as an overhead cost-allocation base,the MOST likely cause of a favourable variable overhead spending variance is:

• A)the production scheduler efficiently scheduled jobs.
• B)a decline in the cost of energy.
• C)strengthened demand for the product.
• D)excessive machine breakdowns.

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Definitions:

Maximum

The highest attainable level or value in a given set of data or a particular function.

Monopolistic Competition

A market structure characterized by many sellers offering differentiated products, with some control over pricing but in a competitive environment.

Price-Making Ability

The capacity of a firm or entity to influence the price of goods or services in the market rather than accepting the market price as given.

Marginal Cost

The outlay required to produce an additional unit of a product or service.