The variable overhead rate variance may be caused by variances in the following production inputs except
A)indirect materials.
B)indirect labor.
C)fixed manufacturing overhead.
D)None of the above impacts the variable overhead rate variance.

Question

Quizplus · Accepted Answer

The variable overhead rate variance is calculated by comparing the actual variable overhead rate to the standard variable overhead rate, which is based on the amount of actual production output. The standard rate includes estimates of indirect materials and indirect labor costs, which are variable costs that can impact the variance. Fixed manufacturing overhead, however, is not included in the variable overhead rate calculation, as it is a fixed cost that is not affected by changes in production output. Therefore, answer choice C - fixed manufacturing overhead - does not impact the variable overhead rate variance.

The Variable Overhead Rate Variance May Be Caused by Variances