Sulema, Inc. repairs and refinishes antique furniture. Manufacturing overhead at Sulema is applied to production on the basis of standard direct labor-hours. Which overhead variance(s) at Sulema would be unfavorably affected if the cost of solvents used to strip the old paint from the furniture unexpectedly doubles in price?
A)variable overhead rate variance
B)variable overhead efficiency variance
C)fixed manufacturing overhead budget variance
D)fixed manufacturing overhead volume variance

Question

Quizplus · Accepted Answer

The variable overhead rate variance would be unfavorably affected because the cost of solvents, which is a variable overhead cost, has increased unexpectedly. This increase in cost would lead to a higher actual variable overhead rate compared to the standard rate.