When there is a standard batch size for production activity:
A) A modification of the traditional approach to constructing the flexible budget for control purposes allows for a more detailed analysis of batch-related overhead costs.
B) It is not possible to construct a flexible budget for cost-control purposes.
C) Standard cost variances for only the variable portion of batch-related manufacturing overhead costs can be calculated.
D) The variable portion of the total flexible-budget variance for batch-related costs can be further decomposed into a spending and a volume variance, which leads to better cost control.

Question

Quizplus · Accepted Answer

DA modification of the traditional approach allows for detailed analysis of batch-related overhead costs, and the variable portion of the flexible-budget variance can be decomposed into spending and volume variances for better cost control.

When There Is a Standard Batch Size for Production Activity