Question: 1. Under what conditions is an overhead volume variance considered favorable?
2. A company uses a standard cost accounting system. Prepare the journal entry to record these direct materials variances:
Direct materials cost actually incurred. . . . . . . . . . . . . . . . . . $73,200
Direct materials quantity variance (favorable) . . . . . . . . . . . . 3,800
Direct materials price variance (unfavorable) . . . . . . . . . . . . 1,300
3. What limits the usefulness to managers of fixed budget performance reports?