An Unfavorable Production-Volume Variance ________

question 126

Multiple Choice

An unfavorable production-volume variance ________.

• A) is not a good measure of a lost production opportunity
• B) indicates that the company had reduced its per unit fixed overhead cost to improve sales
• C) measures the amount of extra fixed costs planned for but not used
• D) takes into account the effect of additional revenues due to maintaining higher prices

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Definitions:

Periodic Inventory System

An inventory accounting system where stock levels and cost of goods sold are calculated at the end of an accounting period, rather than being continuously updated.

Ending Inventory

The price of items for sale at the closing of a fiscal period.

Lower Of Cost

An accounting principle stating that inventory or other assets should be recorded at the lower of either the original cost or the current market value.

Market

A place or system where buyers and sellers interact to trade goods, services, or securities.