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1. What provisions of GAAP (viz., FASB ASC 330-10-30, previously SFAS No. 151-available at www. asc.fasb.org) pertain to the issue of end-of-period disposition of overhead variances? Be specific.
2. Explain the general process of how an activity-based cost (ABC) system can be used to manage organizational spending on resource capacity.
3. How does the analysis of overhead variances differ for companies using a traditional cost system versus an ABC system?
4. Explain two available treatments for disposing of overhead variances at the end of a period.
5. What factors should be considered in determining whether or not to investigate a variance?
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