Which of the Following Should Be Considered When Analyzing Manufacturing

question 83

Multiple Choice

Which of the following should be considered when analyzing manufacturing overhead variances?

• A) whether costs incurred are product costs or period costs
• B) whether direct materials costs are higher than standard costs
• C) whether certain manufacturing overhead costs are controllable
• D) whether direct labor costs can be reduced

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Definitions:

Variable Costs

Costs that vary directly with the level of production or volume of output.

Break-even

The point at which total cost and total revenue are equal, resulting in no net loss or gain.

Variable Costs

Expenses that change in proportion to the level of production or business activity.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.