22.3k views
1 vote
Rowe Corporation reported the following variances for the period just ended: Variable-overhead spending variance: 50,000U Variable-overhead efficiency variance: 28,000U Fixed-overhead budget variance: 70,000U Fixed-overhead volume variance: 30,000U If Rowe desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:

1) 50,000U
2) 70,000U
3) 120,000U
4) 178,000U
5) some other amount

User Ryan DuVal
by
7.8k points

1 Answer

2 votes

Final answer:

The average fixed cost curve is downward-sloping, decreasing as output increases. Spreading the overhead refers to distributing fixed costs over a larger quantity of output, reducing the average fixed cost per unit.

Step-by-step explanation:

The average fixed cost curve is a downward-sloping curve that starts high at low levels of output and decreases as output increases. When fixed costs are spread over a larger quantity of output, the average fixed cost per unit decreases.

Spreading the overhead refers to the process of distributing the fixed costs across a larger quantity of output, which helps reduce the average fixed cost per unit. This allows for a more efficient use of resources and can lead to economies of scale.

User Jason Haslam
by
8.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.