Traveller Corporation Sells One Product and Uses a Standard Cost

question 59

Multiple Choice

Traveller Corporation sells one product and uses a standard cost system. Last year the overhead volume variance was zero. Which of the following is correct?

• A)Actual variable manufacturing overhead cost was equal to standard variable manufacturing overhead cost.
• B)Total applied overhead was equal to total actual overhead.
• C)The denominator activity was equal to actual activity.
• D)The budgeted fixed costs were equal to the applied fixed costs.

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Definitions:

Service Department Allocations

The process of distributing the costs of service departments to producing or operating departments based on their usage of services.

Service Department Charge Rate

The rate at which internal service departments charge other parts of the same organization for the services rendered.

Accounting Department

The division within a company responsible for managing financial records, ensuring compliance with accounting standards, and producing financial statements.

Service Department Cost

Involves the expenses associated with the departments that do not directly produce goods but provide support or services to other departments within an organization.