Causes of Manufacturing Overhead Variances.
Since the controllable variance relates to variable manufacturing costs, the responsibility for the variance rests with the production department. The cause of an unfavorable variance may be: (1) higher than expected use of indirect materials, indirect labor, and factory supplies, or (2) increases in indirect manufacturing costs, such as fuel and maintenance costs.
The overhead volume variance is the responsibility of the production department if the cause is inefficient use of direct labor or machine breakdowns. When the cause is a lack of sales orders, the responsibility rests outside the production department.