Which of the following variances is generally not reported as being favorable or unfavorable?
A) Variable overhead efficiency variance
B) Direct labor rate variance
C) Fixed overhead volume variance
D) Direct materials usage variance

Question

Quizplus · Accepted Answer

The fixed overhead volume variance is simply the difference between the budgeted fixed overhead costs and the actual fixed overhead costs incurred. This variance is not reported as favorable or unfavorable as it is generally outside the control of management and is simply a result of the production volume being higher or lower than expected. The other variances listed (variable overhead efficiency variance, direct labor rate variance, and direct materials usage variance) are all reported as either favorable or unfavorable depending on whether the actual results were better or worse than the budgeted or standard amount.

Which of the Following Variances Is Generally Not Reported as Being