Quality Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Quality Brand had an unfavorable price variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?

Question

Quizplus · Accepted Answer

An unfavorable price variance for variable overhead costs means that the actual costs were higher than budgeted. This indicates that the company paid more for overhead expenses than they had planned for, which could be due to factors such as rising prices for materials or supplies. The other choices (A, C, and D) do not necessarily relate to the price variance for overhead costs.

Quality Brand Products Uses Standard Costing to Manage Their Direct