What might a favourable fixed overhead spending variance indicate?
A)More capacity was used than planned.
B)The denominator level was less than planned.
C)A plant expansion did not proceed as originally planned.
D)The fixed overhead cost-allocation base was not used efficiently.

Question

Quizplus · Accepted Answer

A favourable fixed overhead spending variance indicates that the actual fixed overhead costs were lower than the budgeted fixed overhead costs. This could happen if a planned expense, such as a plant expansion, did not occur, leading to lower than expected fixed overhead costs.

What Might a Favourable Fixed Overhead Spending Variance Indicate