An overhead 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

Overhead volume variance is related to fixed overhead costs, as it measures the difference between the normal capacity (fixed overhead costs that can be recovered in a given period) and the standard hours allowed (the amount of hours expected to be used based on the level of production), multiplied by the predetermined fixed overhead rate.

An Overhead Volume Variance Is Calculated as the Difference Between