Question

Which of the following statements about overhead variances is false?
a. Standard hours allowed are used in calculating the controllable variance.
b. Standard hours allowed are used in calculating the volume variance.
c. The controllable variance pertains solely to fixed costs.
d. The total overhead variance pertains to both variable and fixed costs.

Answer 1

Answer: c. The controllable variance pertains solely to fixed costs

Explanation:

For overhead variance, it should be noted that standard hours allowed are used in calculating the controllable variance, standard hours allowed are used in calculating the volume variance and the total overhead variance pertains to both variable and fixed costs.

Therefore, the option that is not true is that the controllable variance pertains solely to fixed costs(option C)