Which of the following overhead variances would be useful in calling attention to a possible short-term problem in the control of overhead costs:
$\begin{array} { l l }
\text { Spending variance } & \text { Volume variance } \\end{array}$
A.$\begin{array} { l l } &&\text { No } &&&&&&& \text { No } \\end{array}$
B.$\begin{array} { l l }&& \text { No } &&&&&&& \text { Yes } \\end{array}$
C.$\begin{array} { l l } &&\text {Yes } &&&&&&& \text { No } \\end{array}$
D.$\begin{array} { l l }&& \text { Yes } &&&&&&& \text { Yes }
\end{array}$
A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following overhead variances would be useful in calling attention to a possible short-term problem in the control of overhead costs:
$\begin{array} { l l } 
\text { Spending variance } & \text { Volume variance } \\end{array}$
A.$\begin{array} { l l } &&\text { No } &&&&&&& \text { No } \\end{array}$
B.$\begin{array} { l l }&& \text {  No }  &&&&&&& \text { Yes } \\end{array}$
C.$\begin{array} { l l } &&\text {Yes }  &&&&&&& \text { No } \\end{array}$
D.$\begin{array} { l l }&& \text { Yes } &&&&&&& \text { Yes }
\end{array}$
A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

The overhead expenditure variance (Option C) compares the actual overhead costs incurred to the budgeted overhead costs. If the actual costs exceed the budgeted costs, it could indicate a short-term problem in controlling overhead costs. Option A (overhead capacity variance) and Option B (overhead efficiency variance) are more focused on capacity and efficiency issues and may not identify short-term problems. Option D (overhead volume variance) only takes into account changes in volume and may not be relevant for identifying short-term control issues.

Which of the Following Overhead Variances Would Be Useful in Calling