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Harkin Ltd

question 31

Essay

Harkin Ltd.has a $5000 unfavourable variable overhead spending variance.Give two possible reasons for this variance.


Definitions:

Total Cost

Total cost is the complete cost of production that includes both fixed and variable costs.

Quantity

The amount or number of a material or immaterial good considered as a unit or total.

Average Total Cost

The total cost of producing a given output level divided by the quantity of output, indicating the average expense per unit produced.

Marginal Cost

The rise in financial outlay for the production of an extra unit of a product or service.

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