The volume variance calculated for fixed overheads is a way of reconciling the two purposes of costing systems: product costing and cost control.

Question

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The volume variance allows for the reconciliation of actual fixed overhead costs with budgeted fixed overhead costs. This allows for product costing and cost control to be aligned, as the variance can be analyzed to determine if the difference in costs is due to changes in production volume or inefficient cost control measures.

The Volume Variance Calculated for Fixed Overheads Is a Way