What can the fixed overhead cost variance be further subdivided into?
A)Flexible-budget variance and the production-volume variance
B)Price variance and the efficiency variance
C)Spending variance and flexible-budget variance
D)Production-volume variance and the efficiency variance

Question

Quizplus · Accepted Answer

The fixed overhead cost variance can be further subdivided into the flexible-budget variance and the production-volume variance. The flexible-budget variance measures the difference between actual fixed overhead costs and the amount that would be expected based on the budgeted fixed overhead rate and actual output. The production-volume variance measures the impact of the difference between budgeted and actual output on fixed overhead costs. Therefore, option A is the correct answer. Option B is incorrect because it refers to the variance analysis of variable costs. Option C is incorrect because it combines two different types of variances. Option D is incorrect because it refers to the variance analysis of labor costs.

What Can the Fixed Overhead Cost Variance Be Further Subdivided