The higher plant leasing, higher administrative costs and higher depreciation on equipment and plants are all the factors of _____________?
Correct answer: D. unfavorable spending variance
- A. favorable spending variance
- B. unfavorable price varianceGet Executive Coaching
- C. favorable price variance
- D. unfavorable spending variance
Explanation
Higher actual plant leasing, administration and depreciation costs than budgeted increase fixed overhead spending, producing an unfavorable spending variance. Price variance applies mainly to variable input prices, not these fixed overhead items.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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