Four Variance Overhead Analysis

Question 1

A four-variance overhead analysis approach consists for four elements:

Answer 1

the variable overhead spending variance,

the variable overhead efficiency variance,

the fixed overhead spending variance, and

the fixed overhead volume variance

Question 2

A four-variance overhead approach can be condensed into a two-variance approach by combining

Answer 2

the variable overhead spending and efficiency variances

and the fixed spending variance to achieve the controllable overhead variance

Question 3

The second variance in the two-variance approach

Answer 3

is the fixed overhead volume variance

Question 4

the controllable variance consists of

Answer 4

both variable and fixed overhead elements

Question 5

the volume variance consists of

Answer 5

only fixed overhead elements