The production volume variance is also called __________?
Correct answer: A. denominator level variance
- A. denominator level variance
- B. numerator level variance
- C. price level variance
- D. cost level variance
Explanation
Production volume variance arises because actual output differs from the denominator activity level used to set the fixed-overhead rate. For this reason, it is also called denominator-level variance.
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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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