Indicate whether each of the following statements is true or false The sole reason that an overhead volume variance exists in full absorption costing is because fixed overhead costs are being absorbed Variable costing provides more useful information for make or buy decisions than does full absorption costing Overhead volume variances occur frequently in manufacturing environments but seldom in service environments, where full absorption costing is used The contribution margin is defined as the difference between revenue and variable manufacturing costs An argument against the use of variable costing is that it does not comply with generally accepted accounting methods When manufactured inventory grows during an accounting period, full absorption costing reports slightly lower earnings than does variable costing Product standard cost data are often utilized by managers and analysts in departments other than the accounting department Standard cost accounting systems are expensive to operate Wage rate variance information is less useful to a production manager than labor efficiency variance information When standard costs are set tight and inventories are growing, a standard cost accounting system tends to report lower operating profits than does an actual cost accounting system A company could have a zero balance for total material variance for an accounting period while at the same time report credit variances for both the Material Price and Material Usage Variances accounts Material price variance information is more useful to the purchasing department than is material usage variance data

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 18, 2024

Indicate whether each of the following statements is true or false. The sole reason that an overhead volume variance exists in full absorption costing is

Indicate whether each of the following statements is true or false.

The sole reason that an overhead volume variance exists in full absorption costing is because fixed overhead costs are being absorbed.
Variable costing provides more useful information for make-or-buy decisions than does full-absorption costing.
Overhead volume variances occur frequently in manufacturing environments but seldom in service environments, where full-absorption costing is used.
The contribution margin is defined as the difference between revenue and variable manufacturing costs.
An argument against the use of variable costing is that it does not comply with generally accepted accounting methods.
When manufactured inventory grows during an accounting period, full-absorption costing reports slightly lower earnings than does variable costing.
Product standard cost data are often utilized by managers and analysts in departments other than the accounting department.
Standard cost accounting systems are expensive to operate.
Wage rate variance information is less useful to a production manager than labor efficiency variance information.
When standard costs are set tight and inventories are growing, a standard cost accounting system tends to report lower operating profits than does an actual cost accounting system.
A company could have a zero balance for total material variance for an accounting period while at the same time report credit variances for both the Material Price and Material Usage Variances accounts.
Material price variance information is more useful to the purchasing department than is material usage variance data.