Because It Is a Volume Variance,the Fixed Overhead Volume Variance

question 153

True/False

Because it is a volume variance,the fixed overhead volume variance explains why fixed overhead is underallocated or overallocated.

---

Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.

Capital Budgeting

The process used by companies to evaluate and prioritize major investments or projects based on their potential to generate returns over time.

Cannibalization

The situation where a new product eats into the sales of one of the company's existing products, potentially reducing overall sales.

Net Present Value (NPV)

A valuation method used to assess the profitability of an investment by calculating the present value of expected future cash flows minus the initial investment cost.