Which of the following statements is false?
A) The overhead volume variance indicates whether plant facilities were used efficiently during the period.
B) The costs that cause the overhead volume variance are usually controllable costs.
C) The overhead volume variance relates solely to fixed costs.
D) The overhead volume variance is favorable if standard hours allowed for output are greater than the standard hours at normal capacity.

Question

Quizplus · Accepted Answer

The overhead volume variance is primarily driven by the difference between the budgeted fixed overhead and the applied fixed overhead, which is based on the standard hours allowed for actual production. These costs are typically not controllable in the short term, as fixed costs do not vary with the level of production or sales volume.

Which of the Following Statements Is False