Asked by Alyssa Clark on May 18, 2024
Verified
Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a
A) quantity variance
B) controllable variance
C) volume variance
D) rate variance
Controllable Variance
A measure in accounting that represents the difference between actual costs and the budgeted amounts that management could control or influence.
Indirect Factory Wages
Wages paid to employees who are not directly involved in production but whose services are necessary for the manufacturing process.
Budgeted Amounts
Financial projections or estimates of revenue and expenses over a specified period, used for planning and control purposes.
- Differentiate among variable, fixed, and total factory overhead discrepancies.
- Understand the equations and computational procedures for traditional cost deviations.
Verified Answer
RM
Robert MountMay 25, 2024
Final Answer :
B
Explanation :
Controllable variance includes variances that management can influence or control, such as indirect factory wages. When actual indirect factory wages exceed the budgeted amounts, it reflects a controllable variance because management could potentially control or influence these costs.
Learning Objectives
- Differentiate among variable, fixed, and total factory overhead discrepancies.
- Understand the equations and computational procedures for traditional cost deviations.