The total fixed overhead variance is
A) actual fixed overhead - applied fixed overhead.
B) the sum of the spending and volume variances.
C) the sum of the spending and efficiency variances.
D) both actual fixed overhead - applied fixed overhead and the sum of the spending and efficiency variances.
E) both actual fixed overhead - applied fixed overhead and the sum of the spending and volume variances.

Question

Quizplus · Accepted Answer

The total fixed overhead variance is calculated as the difference between the actual fixed overhead and the applied fixed overhead, which also encompasses the sum of the spending and volume variances. The spending variance reflects how well the overheads were controlled, while the volume variance shows the impact of the actual production volume differing from the expected production volume on fixed overheads. Efficiency variances are typically associated with variable overheads, not fixed.

The Total Fixed Overhead Variance Is