Indicate Whether Each of the Following Statements Is True or False

question 137

Short Answer

Indicate whether each of the following statements is true or false.
A company's variable overhead cost represents such inputs as rent and depreciation.______
The variable overhead cost pool is normally assigned to products using many different allocation rates.______
Variable overhead and fixed overhead variances are calculated using the same basic formulas.______
Many companies choose not to calculate price and usage variances for variable overhead costs.______

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Definitions:

Fixed Costs

Expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments.

Break-even Volume

The quantity of sales needed for a product to generate revenue that matches the total costs, resulting in no profit or loss.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production labor.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments or employee wages.