If a company incurs a lot of different variable overhead costs and the activity base is only slightly related to their consumption, which of the following statements is true?
A)The variable overhead efficiency variance will be meaningless.
B)The variable overhead spending variance will be meaningless.
C)Both the variable overhead efficiency variance and the variable overhead spending variance will be meaningless.
D)The variable overhead spending variance will be extremely informative.

Question

Quizplus · Accepted Answer

The Answer of If a company incurs a lot of different variable overhead costs and the activity base is only slightly related to their consumption, which of the following statements is true?
A)The variable overhead efficiency variance will be meaningless.
B)The variable overhead spending variance will be meaningless.
C)Both the variable overhead efficiency variance and the variable overhead spending variance will be meaningless.
D)The variable overhead spending variance will be extremely informative.

If a Company Incurs a Lot of Different Variable Overhead