When there is a difference between the actual volume of production and the standard volume of production,which of the following,based solely on fixed overhead,occurs:
A)Production variance.
B)Volume variance.
C)Overhead cost variance.
D)Quantity variance.
E)Controllable variance.

Question

Quizplus · Accepted Answer

When there is a difference between the actual volume of production and the standard volume of production, it results in a volume variance. The volume variance is a type of overhead variance that is due to the difference between the actual production volume and the standard production volume. It is a measure of the fixed overhead cost efficiency or inefficiency of a company in comparison to the projected or planned production level. The difference between the two volumes results in either a favorable or unfavorable variance.

When There Is a Difference Between the Actual Volume of Production