English Corporation Analyzed the Relationship Between Total Factory Overhead and Changes

question 22

Multiple Choice

English Corporation analyzed the relationship between total factory overhead and changes in direct labor hours.It found the following:
Y = $6,000 + $6X
The Y in the equation is an estimate of

• A) total variable costs.
• B) total direct labor hours.
• C) total factory overhead.
• D) total fixed costs.

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Definitions:

Cost Drivers

Factors that cause the cost of an activity to go up or down, such as the volume of production activity.

Return on Investment

A measure used to evaluate the efficiency of an investment or to compare the efficiencies of several investments.

Divisional Performance Measure

Metrics or standards used to evaluate the efficiency, profitability, and productivity of a distinct segment or division within a larger company.

Divisional Managers

Individuals responsible for overseeing a specific division within a company, managing its operations, performance, and strategy.