Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:

-For variable manufacturing overhead, there is no:
A)spending variance
B)efficiency variance
C)flexible-budget variance
D)production-volume variance

Question

Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
  
-For variable manufacturing overhead, there is no:
A)spending variance 
B)efficiency variance 
C)flexible-budget variance 
D)production-volume variance

Quizplus · Accepted Answer

The production-volume variance is not applicable for variable manufacturing overhead as it is a result of changes in fixed costs due to changes in production level. Variable manufacturing overhead costs vary directly with production level, so there is no separate production-volume variance for them. Spending variance measures the difference between actual and budgeted variable manufacturing overhead costs, efficiency variance measures the efficiency of variable manufacturing overhead usage, and flexible-budget variance measures the difference between flexible and static budgeted variable manufacturing overhead costs.

Answer the Following Questions Using the Information Below