The total variable overhead variance is comprised of the
A)variable overhead efficiency and fixed variances.
B)fixed overhead budget and volume variances.
C)variable overhead spending and efficiency variances.
D)labor efficiency and rate variances.

Question

Quizplus · Accepted Answer

The total variable overhead variance is composed of two variances: the variable overhead spending variance and the variable overhead efficiency variance. The spending variance is caused by the difference between actual and budgeted variable overhead costs, while the efficiency variance is caused by the difference between actual and budgeted variable overhead usage. This combination of variances is represented as the total variable overhead variance. Choices A and D refer to labor variances, while choice B refers to fixed overhead variances, which are not included in the total variable overhead variance.

The Total Variable Overhead Variance Is Comprised of the