Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:

-An unfavorable variable overhead spending variance indicates that:
A)variable overhead items were not used efficiently
B)the price of variable overhead items was more than budgeted
C)the variable overhead cost-allocation base was not used efficiently
D)the denominator level was not accurately determined

Question

Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
  
-An unfavorable variable overhead spending variance indicates that:
A)variable overhead items were not used efficiently 
B)the price of variable overhead items was more than budgeted 
C)the variable overhead cost-allocation base was not used efficiently 
D)the denominator level was not accurately determined

Quizplus · Accepted Answer

An unfavorable variable overhead spending variance reflects that the price paid for variable overhead items was more than budgeted. It does not indicate if they were used efficiently or if the cost-allocation base was used efficiently or if the denominator level was accurately determined.

Answer the Following Questions Using the Information Below