Use the following to answer questions:
Controller Rachel Tabak of Johnson Inc. is in the process of analyzing its manufacturing overhead costs for March. March results follow:

-What are the variable overhead efficiency and variable volume variance, respectively?
A) $15,000 favorable; $200,000 unfavorable
B) $15,000 favorable; there is never a volume variance for variable overhead
C) $15,000 unfavorable; $0
D) $15,000 unfavorable; there is never a volume variance for variable overhead

Question

Use the following to answer questions:
Controller Rachel Tabak of Johnson Inc. is in the process of analyzing its manufacturing overhead costs for March. March results follow:
 
-What are the variable overhead efficiency and variable volume variance, respectively?
A) $15,000 favorable; $200,000 unfavorable 
B) $15,000 favorable; there is never a volume variance for variable overhead 
C) $15,000 unfavorable; $0 
D) $15,000 unfavorable; there is never a volume variance for variable overhead

Quizplus · Accepted Answer

Variable overhead efficiency variance measures the efficiency of using the variable overhead resources, and it can be favorable or unfavorable. However, volume variance is associated with fixed overhead, not variable overhead, because variable overhead costs are expected to vary with the level of production. Therefore, there is never a volume variance for variable overhead.

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