If the actual volume of production differs from the expected volume of production,the same variable overhead costs per unit are used for ________ and ________ purposes.
A) budgeting; employee motivation
B) budgeting; product costing
C) flexible budgets; employee hiring
D) planning; employee hiring

Question

Quizplus · Accepted Answer

When the actual volume of production differs from the expected volume of production, the variable overhead costs are still allocated to the products using the same predetermined rate. This is done for the purpose of product costing, as the variable overhead costs are needed to determine the total cost of the product. Additionally, the variable overhead costs are also used in budgeting, as the predetermined rate is used to create the budgeted variable overhead cost for a specific level of production.

If the Actual Volume of Production Differs from the Expected