An unfavorable variable overhead spending variance may be caused by
A) the use of excessive quantities of variable overhead items.

B) the payment of lower prices for variable overhead items used.
C) the use of excessive quantities of the variable overhead allocation base.
D) both a and B

Question

An unfavorable variable overhead spending variance may be caused by
A) the use of excessive quantities of variable overhead items.

B) the payment of lower prices for variable overhead items used.
C) the use of excessive quantities of the variable overhead allocation base.
D) both a and B

Quizplus · Accepted Answer

An unfavorable variable overhead spending variance occurs when the actual cost of the variable overhead items used exceeds the budgeted cost for those items. This could be caused by using excessive quantities of variable overhead items, which would result in higher costs than budgeted. Option B, payment of lower prices, would result in a favorable variance, not an unfavorable one. Option C, excessive usage of the allocation base, would affect the variable overhead efficiency variance, not the variable overhead spending variance. Therefore, option A is the best choice.

An Unfavorable Variable Overhead Spending Variance May Be Caused by