A variable overhead spending variance can occur because

• prices for individual overhead items have increased or decreased.

• more of an individual overhead item was used than expected.

• less of an individual overhead item was used than expected.

• All of the above.

Which of the following statements is true

• The materials price variance is normally caused by the production department.

• Unfavorable material quantity variances can be caused by inexperienced workers, faulty machinery, or carelessness.

• Ideal standards represent an efficient level of performance under normal operating conditions.

• An unfavorable variance suggests efficiencies in incurring costs and in using materials and labor.

Rameriz Company erred in selecting a denominator activity and chose a much higher level than was realistic. This error would most likely result in a large:

Multiple Choice

• favorable variable overhead efficiency variance.

• favorable fixed manufacturing overhead budget variance.

• unfavorable overhead volume variance.

• unfavorable fixed manufacturing overhead budget variance.

An unfavorable materials quantity variance indicates that:

• actual usage of material exceeds the standard material allowed for output.

• standard material allowed for output exceeds the actual usage of material.

• actual material price exceeds standard price.

• standard material price exceeds actual price.

Which of the following standard cost variances would usually be least controllable by a production supervisor?

• Fixed overhead volume variance.

• Variable overhead efficiency variance.

• Direct labor efficiency variance.

• Materials usage (quantity) variance