Question

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the: _________
a. factory overhead cost controllable variance
b. factory overhead cost volume variance
c. factory overhead direct labor variance
d. standard capacity utlization variance

Answer 1

Answer:

B)factory overhead cost volume variance

Explanation:

From the question, there was an an assumption that the standard fixed overhead rate is based on full capacity, in this case the cost of available but unused productive capacity is indicated by the factory overhead cost volume variance. Factory overhead cost volume variance can be regarded as the difference that exist between the fixed overhead that is associated to those good/ service from the firm on production volume and the budgeted amount that is associated to goods) services that are been produced. fixed overhead costs

could be Factory rent and others.