If the standard hours allowed are less than the standard hours at normal capacity
A) the overhead volume variance will be unfavorable.
B) variable overhead costs will be underapplied.
C) the overhead controllable variance will be favorable.
D) variable overhead costs will be overapplied.

Question

Quizplus · Accepted Answer

When the standard hours allowed are less than the standard hours at normal capacity, it means that the actual production volume is less than what was expected. This leads to a situation where the fixed overhead costs are spread over fewer units than planned, resulting in a higher cost per unit and an unfavorable overhead volume variance.

If the Standard Hours Allowed Are Less Than the Standard