In an expanded overhead variance, the variable overhead variance is composed of the:

 In an expanded overhead variance, the variable overhead variance is composed of the:
 
multiple choice
spending and volume variances
efficiency and volume variances
spending and efficiency variances Correct

Explanation
Knowledge Check 01
 
In the expanded overhead variance model, the variable overhead variance is composed of the variable spending and efficiency variances.

 The variable overhead efficiency variance is calculated as:
 
multiple choice
(AH × AVR) − (AH × SVR)
(AH × SVR) − (SH × SVR) Correct
(AH × AVR) − (SH × SVR)

Explanation
Knowledge Check 01
 
Variable overhead efficiency variance = (AH × SVR) − (SH × SVR).

 

The fixed overhead spending variance is calculated as:
 
multiple choice
Actual fixed overhead − Applied Fixed Overhead
Actual fixed overhead − Budgeted fixed overhead (from flexible budget) Correct
Budgeted fixed overhead (from flexible budget) − Applied fixed overhead

Explanation
Knowledge Check 01
 
Fixed overhead spending variance = Actual fixed overhead − Budgeted fixed overhead (from flexible budget). 

Unfavorable materials variances will receive which of the following treatments in preparing a direct materials journal entry?
 
multiple choice
Debit Correct
Credit

Explanation
Knowledge Check 01
 
Unfavorable variances are debited.

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