Variable overhead spending variances can result from unattainable variable allocation rates. In turn, those rates may be caused by I. Inappropriate allocation bases
II. Poor estimates of total overhead costs
III. Change in estimated life of depreciable assets
A) I only
B) I and II only
C) I and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Inappropriate allocation bases and poor estimates of total overhead costs can lead to unattainable variable allocation rates, affecting variable overhead spending variances. Changes in the estimated life of depreciable assets do not directly impact variable overhead rates.

Variable Overhead Spending Variances Can Result from Unattainable Variable Allocation