The overhead volume variance is
A) actual overhead less overhead budgeted for actual hours.
B) actual overhead less overhead budgeted for standard hours allowed.
C) overhead budgeted for actual hours less applied overhead.
D) the fixed overhead rate times the difference between normal capacity hours and standard hours allowed.

Question

Quizplus · Accepted Answer

The overhead volume variance is calculated as the fixed overhead rate times the difference between normal capacity hours and standard hours allowed. This variance measures the efficiency of using the production capacity.

The Overhead Volume Variance Is