Variable overhead costs can be managed by:
A)reducing the consumption of the cost-allocation base
B)eliminating nonvalue-adding variable costs
C)planning for appropriate capacity levels
D)Both A and B are correct.

Question

Quizplus · Accepted Answer

Reducing the consumption of the cost-allocation base and eliminating nonvalue-adding variable costs are effective ways to manage variable overhead costs. By reducing the amount of cost-allocation base used, less variable overhead costs will be incurred. Likewise, by eliminating nonvalue-adding variable costs, unnecessary variable overhead costs can be avoided. Planning for appropriate capacity levels can also help manage variable overhead costs by ensuring that resources are used efficiently and effectively. Therefore, both A and B are correct choices for managing variable overhead costs.

Variable Overhead Costs Can Be Managed By