1. The variable overhead efficiency variance has nothing to do with efficient use of variable over-head. Do you agree or disagree? Why?
2. Explain why the fixed overhead spending variance is usually very small.
3. What is the cause of an unfavorable volume variance? Does the volume variance convey any meaningful information to managers?
4. Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance? Explain.