Which of the following could cause a variable overhead flexible budget variance?
A) Variable overhead costs being greater than expected for the given driver usage
B) Variable overhead costs being less than expected for the given driver usage
C) Driver usage being greater than expected for the given level of production
D) Driver usage being less than expected for the given level of production
E) All of the above

Question

Quizplus · Accepted Answer

A variable overhead flexible budget variance occurs when there is a difference between the actual variable overhead costs incurred and the expected costs given the actual level of activity (driver usage). This variance can be caused by variable overhead costs being either higher or lower than expected for the actual driver usage, or by changes in driver usage itself, regardless of whether it is higher or lower than expected. Thus, all the options listed can contribute to a variable overhead flexible budget variance.

Which of the Following Could Cause a Variable Overhead Flexible