Variance analysis for overhead normally focuses on
A)efficiency variances for machinery and indirect production costs.
B)volume variances for fixed overhead costs.
C)the controllable variance as a lump-sum amount.
D)the difference between budgeted and applied variable overheaD.

Question

Quizplus · Accepted Answer

Variance analysis for overhead typically involves analyzing efficiency variances for machinery and indirect production costs, as these are the costs that can vary based on the level of activity or production. Volume variances for fixed overhead costs are typically not as relevant for overhead variance analysis. The controllable variance is also typically analyzed separately, as it focuses on the variability that can be controlled by management. Budgeted and applied variable overhead differences may be indicative of inefficiencies or other issues, but are not the primary focus of overhead variance analysis.

Variance Analysis for Overhead Normally Focuses on