Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 Efficiency variance Never a variance) Spending variance.
16.10 There are two never a variance entries
in the variance analysis • Never a variance for the production-volume variance for variable manufacturing overhead – the production-volume variance applies only to a fixed manufacturing overhead because a lump sum is to be allocated.
• Never a variance for the efficiency variance for fixed manufacturing overhead – because there can be no efficiency variance for fixed overhead, this amount is a lump sum regardless of the output level.
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