Bannister Motors Corporation reported the following variances for the period just ended: Variable-overhead spending variance: $50,000U Variable-overhead eﬃciency variance: $28,000U Fixed-overhead budget variance: $70,000U Fixed-overhead volume variance: $30,000U If Bannister prepared an overhead cost performance report, which of these overhead variances is likely to be excluded from the report?
A)Variable-overhead spending variance.
B)Variable-overhead eﬃciency variance.
C)Fixed-overhead budget variance.
D)Fixed-overhead volume variance.
E)None of the variances would be excluded.

Question

Quizplus · Accepted Answer

The fixed-overhead volume variance is typically excluded from an overhead cost performance report because it relates to the level of production activity rather than the efficiency or spending control of overhead costs.

Bannister Motors Corporation Reported the Following Variances for the Period