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Data for the latest period for a company which makes and sells a single product are as follows:
There were no budgeted or actual changes in inventories during the period.
The variable overhead expenditure variance for the period was:
Suggested Answer: B
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30 comments · newest first
MA
Major
11 months ago
Not sure about that, I thought it was supposed to be adverse.
LA
Layla
11 months ago
I’m leaning towards $462 favorable, though.
VA
Val
11 months ago
Wait, how can it be $2,202? That seems off.
GI
Gianna
12 months ago
Totally agree, that makes sense!
TE
Tess
12 months ago
I think it’s $462 adverse.
SA
Sabrina
1 year ago
I feel like $462 is a common figure that comes up in these types of problems, but I can't remember if it's favorable or adverse in this case.
IR
Ira
1 year ago
This question reminds me of a similar one we did in class where we had to determine if the variance was favorable or adverse. I think I chose the wrong option then too!
NI
Nilsa
1 year ago
I think the variable overhead expenditure variance is calculated based on actual vs. budgeted costs, but I can't recall the exact formula we used.
AD
Adrianna
1 year ago
I remember we practiced calculating variances, but I'm not sure how to apply it to this specific question.
KA
Kathrine
1 year ago
This seems like a tricky one. I better double-check my work to make sure I don't miss anything important.
CO
Corinne
1 year ago
Okay, I think I've got this. I just need to compare the actual variable overhead to the budgeted variable overhead and calculate the difference. Should be a simple calculation.
VA
Val
1 year ago
Hmm, I'm a bit confused by the question. I need to think through the variable overhead expenditure variance calculation step-by-step to make sure I get it right.
CO
Cordelia
1 year ago
This looks like a straightforward variance analysis question. I'll start by calculating the variable overhead expenditure variance based on the information provided.
MY
Myra
2 years ago
I'm not sure, but I think the answer might be D) $2,202 adverse.
GA
Garry
2 years ago
Option D is the way to go. $2,202 adverse variance? That's not what the boss wants to see. Time to tighten the purse strings.
MA
Maia
2 years ago
Let's work on a plan to reduce the overhead costs and improve our performance next period.
BU
Bulah
2 years ago
Maybe we need to review our overhead costs and see where we can make cuts.
IS
Isabelle
2 years ago
Agreed, we should investigate the reasons behind such a large adverse variance.
VA
Valentin
2 years ago
Option D is definitely not good news. We need to figure out what went wrong.
TH
Theodora
2 years ago
I agree with Lon, because the variable overhead expenditure was lower than expected.
LU
Lucina
2 years ago
I'm going with option C. $2,202 favourable sounds like a win to me. Maybe they can use that to buy the accounting team a pizza party.
JO
Joseph
2 years ago
Definitely! It's always good to have a favourable variance in overhead expenditure.
DA
Dalene
2 years ago
Yeah, that sounds like a win for the company. A pizza party for the accounting team would be a nice way to celebrate.
SE
Selma
2 years ago
I think option C is the correct answer. $2,202 favourable is a good variance.
RO
Rosita
2 years ago
Hmm, looks like we need to dig into those overhead costs. This variable overhead variance could make or break the bottom line.
JO
Jolene
2 years ago
That's good news, it means we were able to control our variable overhead costs effectively.
MI
Mignon
2 years ago
I think the variance is $462 favourable.
TA
Tayna
2 years ago
I agree, it could have a significant impact on our financial performance.
DA
Dalene
2 years ago
We should definitely investigate the variable overhead expenditure variance.
LO
Lon
2 years ago
I think the answer is C) $2,202 favourable.