If the standard hours allowed are less than the standard hours at normal capacity, the volume variance
A)cannot be calculated.
B)will be favourable.
C)will be unfavourable.
D)will be greater than the spending variance.

Question

Quizplus · Accepted Answer

If the standard hours allowed are less than the standard hours at normal capacity, it means that the actual hours worked are less than the capacity hours. This scenario indicates an unfavorable variance because the company did not fully utilize its capacity, resulting in a lower volume of output than expected.

If the Standard Hours Allowed Are Less Than the Standard