A fixed-overhead volume variance would normally arise when:
A) actual hours of activity coincide with actual units of production.
B) budgeted fixed overhead is less than (or greater than) applied fixed overhead.
C) there is a fixed-overhead budget variance.
D) actual fixed overhead exceeds budgeted fixed overhead.
E) there is a variable-overhead efficiency variance.

Question

Quizplus · Accepted Answer

A fixed-overhead volume variance arises when there is a difference between the budgeted fixed overhead and the applied fixed overhead. This variance indicates whether the company has applied more or less overhead to production than what was budgeted, based on the standard hours allowed for the actual production achieved.

A Fixed-Overhead Volume Variance Would Normally Arise When