In practice,companies generally prorate overhead variances when it would materially affect ________ and ________.
A)inventory valuations; manager bonuses
B)inventory valuations; stock option plans
C)inventory valuations; net income
D)stock option plans; manager bonuses

Question

Quizplus · Accepted Answer

Overhead variances are prorated when they materially affect inventory valuations and net income, as these are important metrics for financial reporting purposes. Manager bonuses and stock option plans are not typically affected by overhead variances.

In Practice,companies Generally Prorate Overhead Variances When It Would Materially