The difference between the actual volume and the budgeted volume,multiplied by the fixed overhead rate based on budgeted volume,is the:
A)fixed overhead spending variance.
B)fixed overhead price variance.
C)fixed overhead efficiency variance.
D)fixed overhead volume variance.

Question

Quizplus · Accepted Answer

The formula given in the question (difference between actual volume and budgeted volume multiplied by fixed overhead rate based on budgeted volume) is used to calculate the fixed overhead volume variance. This variance measures the difference between the overhead that should have been incurred (based on the budgeted volume) and the overhead that was actually incurred (based on the actual volume). Therefore, the correct answer is D - fixed overhead volume variance.

The Difference Between the Actual Volume and the Budgeted Volume,multiplied