The fixed overhead budget variance can be broken down into two parts: the spending variance and the volume variance.

Question

Quizplus · Accepted Answer

The fixed overhead budget variance is indeed divided into two components: the spending variance, which reflects the difference between the actual fixed overhead costs and the budgeted fixed overhead costs, and the volume variance, which measures the difference between the budgeted production volume and the actual production volume.

The Fixed Overhead Budget Variance Can Be Broken Down into Two