ECONOMICS

Detailed explanation-1: -Transcribed image text: If the price a company paid for overhead items, such as utilities, decreased during the year, the company would probably report a(n): o favorable etficiency variance.

Detailed explanation-2: -Variable overhead spending variance is the difference between actual variable overhead cost, which is based on the costs of indirect materials involved in manufacturing, and the budgeted costs called the standard variable overhead costs.

Detailed explanation-3: -The fixed overhead spending variance is the difference between the actual fixed overhead expense incurred and the budgeted fixed overhead expense.

Detailed explanation-4: -There is never an efficiency variance for fixed overhead because managers cannot be more or less efficient in dealing with an amount that is fixed regardless of the output level. The result is that the flexible-budget variance amount is the same as the spending variance for fixed-manufacturing overhead.

Detailed explanation-5: -Which of the following best describes the variable manufacturing overhead spending variance? A measure of how actual total spending on variable manufacturing overhead compared to the total amount that “should” have been spent based on the actual amount of the allocation base used.