Two of the primary ways to manage variable overhead costs include
A)eliminating non-value-added costs and reducing the consumption of cost drivers.
B)eliminating non-value-added costs and increasing fixed overhead expenses.
C)reducing the consumption of cost drivers and increasing variable costs.
D)using more energy-efficient equipment and planning for appropriate capacity levels.
E)increasing variable costs and eliminating non-value added costs.

Question

Quizplus · Accepted Answer

One way to manage variable overhead costs is by eliminating non-value-added costs, such as unnecessary expenses or inefficient processes. Another way is to reduce the consumption of cost drivers, which are the activities that cause variable overhead costs to increase. By identifying and addressing these drivers, such as reducing machine downtime or improving production efficiency, a company can effectively manage its variable overhead costs. Increasing fixed overhead expenses or variable costs, as well as using energy-efficient equipment and planning for appropriate capacity levels, are not primary ways to manage variable overhead costs.

Two of the Primary Ways to Manage Variable Overhead Costs