An Unfavorable Variable Overhead Spending Variance May Be Caused by

question 143

Multiple Choice

An unfavorable variable overhead spending variance may be caused by

• A) the use of excessive quantities of variable overhead items.
• B) the payment of lower prices for variable overhead items used.
• C) the use of excessive quantities of the variable overhead allocation base.
• D) both the use of excessive quantities of variable overhead items and the payment of lower prices for variable overhead items used.

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet production goals.

Budgeted Production

The total number of units a company plans to produce in a specific period, according to its budget.

Sewing Labor

The work performed by individuals in creating garments or other items through sewing, often considered a direct labor cost in manufacturing.