Use the following information to answer the following Questions
Bannister Motors Corporation reported the following variances for the period just ended:
Variable-overhead spending variance: $50,000U
Variable-overhead efficiency variance: $28,000U
Fixed-overhead budget variance: $70,000U
Fixed-overhead volume variance: $30,000U

-If Bannister desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:
A) $50,000U.
B) $70,000U.
C) $120,000U.
D) $178,000U.
E) None of the answers is correct.

Question

Use the following information to answer the following Questions
Bannister Motors Corporation reported the following variances for the period just ended: 
Variable-overhead spending variance: $50,000U
Variable-overhead efficiency variance: $28,000U
Fixed-overhead budget variance: $70,000U
Fixed-overhead volume variance: $30,000U

-If Bannister desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:
A) $50,000U.
B) $70,000U.
C) $120,000U.
D) $178,000U.
E) None of the answers is correct.

Quizplus · Accepted Answer

The variances that arise primarily from managers' expenditures in excess of anticipated amounts are the variable-overhead spending variance ($50,000U) and the fixed-overhead budget variance ($70,000U). Adding these gives $120,000U.

Use the Following Information to Answer the Following Questions