A manager should not always view a favorable variable overhead spending variance as desirable.

Question

Quizplus · Accepted Answer

A favorable variable overhead spending variance may indicate that the actual variable overhead costs were lower than expected, but it could also mean that there was an underutilization of resources or a decrease in quality. Therefore, a manager should investigate the cause of the favorable variance and make sure that it is not masking underlying problems or inefficiencies in the production process.

A Manager Should Not Always View a Favorable Variable Overhead