An overhead fixed volume variance is calculated as the difference between normal capacity hours and standard hours allowed
A)times the total predetermined overhead rate.
B)times the predetermined variable overhead rate.
C)times the predetermined fixed overhead rate.
D)divided by actual number of hours worked.

Question

Quizplus · Accepted Answer

The overhead fixed volume variance is related to the fixed overheads, therefore should be calculated by multiplying the difference between normal capacity hours and standard hours allowed by the predetermined fixed overhead rate, which is the rate used to apply fixed overheads to production.

An Overhead Fixed Volume Variance Is Calculated as the Difference