Posted: November 15th, 2022

Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance?

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Make Intial post and respomd to with substantive posts to two peers posts.
Fixed Overhead Costs
Brandt Gardner, the owner-manager of a small firm that manufactures feed processing equipment and round-hay bailers, is unhappy with the latest report on financial performance in the Kansas City, Missouri, plant. The company had recently installed a standard cost system in the Kansas City plant with the objective of controlling manufacturing costs. The performance report for the year ended revealed that the variances for materials, labor, and variable overhead were all within the desired ranges, but the fixed overhead spending and volume variances were both significantly unfavorable. Brandt wanted an explanation of the fixed overhead variances and a recommendation.
Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance? Explain.

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