Which of the following statements is incorrect regarding variable overhead variances?
A) Variable overhead variances are based on the same general formulas used to compute the materials and labor price variances.
B) Variable overhead costs represent many inputs such as supplies, utilities and indirect labor.
C) All companies must calculate price and usage variances for variable overhead costs.
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

Not all companies are required to calculate both price and usage variances for variable overhead costs. It depends on the company's accounting system and management decisions. Some companies may only calculate a total variable overhead variance instead.

Which of the Following Statements Is Incorrect Regarding Variable Overhead