Rowe Corporation reported the following variances for the period just ended:
Variable-overhead spending variance: $50,000U
Variable-overhead efficiency variance: $28,000U
Fixed-overhead budget variance: $70,000U
Fixed-overhead volume variance: $30,000U
If Rowe desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:

Question

Quizplus · Accepted Answer

The variable-overhead spending variance and fixed-overhead budget variance are both unfavorable variances that indicate managers spent more than anticipated in those areas. These variances total $120,000U ($50,000U + $70,000U), so the correct answer is C. The other variances are not related to managers' expenditures in excess of anticipated amounts.

Rowe Corporation Reported the Following Variances for the Period Just