When machine-hours are used as an overhead cost-allocation base,the MOST likely cause of a favourable variable overhead spending variance is:
A)the production scheduler efficiently scheduled jobs.
B)a decline in the cost of energy.
C)strengthened demand for the product.
D)excessive machine breakdowns.

Question

Quizplus · Accepted Answer

A decline in the cost of energy would result in a lower variable overhead rate per machine-hour, which would lead to a favourable spending variance. The other choices are not related to variable overhead spending variance.

When Machine-Hours Are Used as an Overhead Cost-Allocation Base,the MOST