A Negative Fixed Overhead Volume Variance Can Be Caused Due

question 106

Multiple Choice

A negative fixed overhead volume variance can be caused due to the following except:

• A) Sales orders at a low level
• B) Machine breakdowns
• C) Employee inexperience
• D) Increase in utility costs

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Definitions:

Fixed Cost

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Patent

A legal document granted by the government, giving an inventor exclusive rights to make, use, and sell an invention for a certain number of years.

Demand Function

A mathematical function that describes the quantity of a good that consumers are willing and able to purchase at various prices.

Subsidy

A financial contribution granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.