Why are fixed overhead variances considered noncontrollable?
Management has limited ability to control fixed overhead costs in the short run because these costs are incurred to provide the capacity to produce. Fixed costs can be controllable to a limited extent at the point of commitment; therefore, the FOH spending variance can be considered, in part, controllable.
On the other hand, the volume variance arises solely because management has selected a specific level of activity on which to calculate the FOH application rate. If actual activity differs at all from this selected base, a volume variance will occur. Production levels are controllable to a very limited extent in the production area. Production is more often related to ability to sell and demand; thus, these levels are not controllable by the production manager.
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City Medical Clinic has two service departments, Building Services and Energy, and three operating departments, Pediatrics, Geriatrics, and Surgery. The clinic allocates the cost of Building Services on the basis of square footage and Energy on the basis of patient days. No distinction is made between variable and fixed costs. Budgeted operating data for the year just completed follow:??Service DepartmentsOperating Departments??Building ServicesEnergyPediatricsGeriatricsSurgery?Budgeted costs before allocation$30,000$15,000$135,000$90,000$150,000?Square feet2,0008,00012,00036,00024,000?Patient days??2,7503,8504,400Required:a. Prepare a schedule to allocate service department costs to operating departments by the direct method (round all dollar amounts to the nearest
whole dollar).b. Prepare a schedule to allocate service department costs to operating departments by the step-down method, allocating Building Services first (round all amounts to the nearest whole dollar). What will be an ideal response?
Optical storage devices store bit values as variations in ____________________
Fill in the blank(s) with correct word
FINRA is a government agency with mandate to protect America's investors by making sure the securities industry operates fairly and honestly.
Answer the following statement true (T) or false (F)
According to contrarians, the big decline in the stock market during the Great Recession was
A. proof that the future of capitalism should rely more on small, unincorporated businesses rather than big corporations. B. proof that the stock market was not as sound an investment as most people thought. C. a great opportunity to invest in stocks. D. a sign that more government regulation was needed to prevent big losses.