What does an unfavourable fixed overhead spending variance indicate?
A)The fixed overhead cost-allocation base was not used efficiently.
B)There was more excess capacity than planned.
C)The price of fixed overhead items cost more than budgeted.
D)The denominator level was more than planned.

Question

Quizplus · Accepted Answer

An unfavourable fixed overhead spending variance indicates that the actual fixed overhead costs were higher than the budgeted or planned costs. This could be due to an increase in prices for items that are part of fixed overhead expenses, such as rent, salaries, or utilities, not because of inefficiencies in using the cost-allocation base, excess capacity, or changes in the denominator level.

What Does an Unfavourable Fixed Overhead Spending Variance Indicate