The production volume variance under variable costing is ______________?
Correct answer: B. not a must
- A. must
- B. not a must
- C. non-inventoriable
- D. inventoriable
Explanation
Under variable costing, fixed manufacturing overhead is expensed in the period rather than included in inventory, so a production-volume variance is not computed. Thus it is not a required variance under this method.
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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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