A Favorable Fixed Overhead Volume Variance for a Manufacturing Company

question 86

Multiple Choice

A favorable fixed overhead volume variance for a manufacturing company could indicate

• A) the creation of excess inventory.
• B) the actual overhead exceeded the budgeted overhead.
• C) sales exceeded production.
• D) variable overhead costs were less than fixed overhead costs.

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Definitions:

FR(N)

Refers to the function assessing the rate at which a system or component fails, emphasizing its reliability over time.

Preventive Maintenance

The routine maintenance and care of equipment and machinery to prevent unexpected breakdowns and costly repairs.

Breakdown Cost

The costs associated with a machinery or equipment failure, including repair costs, lost production time, and impact on product quality.

Components In Series

Parts or elements arranged in a sequence where each component must function correctly for the overall system to work.