Which of the Following Statements About Variable Overhead Variances Is

question 50

Multiple Choice

Which of the following statements about variable overhead variances is correct?

• A) Variable overhead efficiency variance highlights any inefficient uses of variable indirect costs such as electricity.
• B) Variable overhead efficiency variance is not a useful control tool.
• C) Variable overhead spending variance is useful only as a product costing tool.
• D) Variable overhead spending variance may be caused by lower than expected usage of direct labour hours.

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Definitions:

Investee

The entity in which an investment is made, often subject to the influence or control of the investor through ownership of equity shares or other mechanisms.

Bargain Purchase

An acquisition where the purchase price is significantly less than the fair value of the net identifiable assets of the acquired company.

Deferred Tax Liability

A tax obligation that arises from temporary differences between the accounting and tax treatment of assets and liabilities which is expected to be settled in the future.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, also known as stockholders' equity or owner's equity.