If material costs rise due to a market increase, overall variable overhead will: A) Go up...
If material costs rise due to a market increase, overall variable overhead will:
A) Go up in relation to the cost increase.
B) Need to be reviewed to reduce the labor and waste to bring the total to the budgeted level.
C) Need to be reviewed and revised, if the cost cannot be offset by increased efficiency in the production process.
Homework Answers
Variable Overheads includes Indirect Materials and Indirect Labor.
If the Materials Cost rises, results rise in direct materials costs in producing finished goods and indirect material cost also. There by Manufacturing Costs will increases. Variable Manufacturing Costs are in Direct Relationship with Units produced.
So Option A is Correct Answer.
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If material costs rise due to a market increase, overall
variable overhead will:
A) Go up...
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overhead is $180,000 per year.
The company manufactures a single product whose standard direct
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