If the Actual Volume of Production Differs from the Expected

question 37

Multiple Choice

If the actual volume of production differs from the expected volume of production,the fixed overhead costs used for budgeting and product costing are ________.

• A) the same
• B) different
• C) indeterminate
• D) changing over the accounting period

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Definitions:

Fixed Capital Input

Assets and resources used in production that are not consumed or changed and can be used repeatedly over time, such as machinery and buildings.

Variable Labor Input

Labor whose usage level can be changed in the short term to match the level of output production.

Lowest Cost Level

The point at which a business can produce its goods or services at the minimum possible cost.

Average Total

The sum of all the costs of production (fixed and variable) divided by the total quantity produced; often referred to as average total cost.