As overall productive activity changes, the following should move in the same direction, in roughly the same proportion:
A) total variable overhead cost; standard variable overhead rate.
B) total variable overhead cost; fixed overhead budget variance.
C) cost driver; total variable overhead cost.
D) cost driver; fixed overhead cost.

Question

Quizplus · Accepted Answer

The total variable overhead cost should move in the same direction and proportion as the cost driver, as the cost driver is what causes the variable overhead cost to change. Therefore, C is the best choice. The other options (A and B) do not necessarily have a direct relationship with overall productive activity.

As Overall Productive Activity Changes, the Following Should Move in the Same