Rameriz Company Erred in Selecting a Denominator Activity and Chose

question 55

Multiple Choice

Rameriz Company erred in selecting a denominator activity and chose a much higher level than was realistic. This error would most likely result in a large

• A)favourable variable overhead efficiency variance.
• B)favourable fixed overhead budget variance.
• C)unfavourable overhead volume variance.
• D)unfavourable fixed overhead budget variance.

---

Definitions:

Expected Inflation

The rate at which the general level of prices for goods and services is anticipated to rise over a specified period.

Actual Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, as it is currently being measured or experienced in the economy.

Unemployment Rate

The ratio of individuals in the labor force who are without a job and are searching for employment.

Expected Inflation

The rate at which the general level of prices for goods and services is projected to rise over a specific period, reflecting the public's expectations for future inflation.