(Appendix 11A)Alex Corporation has a large underapplied overhead balance in the manufacturing overhead account.This could be explained by:
A)an unfavorable volume variance, assuming all other variances are zero.
B)a favorable volume variance, assuming all other variances are zero.
C)standard hours allowed for the period's output being greater than denominator hours for the period.
D)favorable total variance for overhead.

Question

Quizplus · Accepted Answer

An unfavorable volume variance indicates that the actual production was less than expected, leading to underapplied overhead as fixed costs are spread over fewer units.

(Appendix 11A)Alex Corporation Has a Large Underapplied Overhead Balance in the Manufacturing