For which of the following reasons does the volume variance arise?
A)Overhead costs incurred were greater or less than the amount budgeted.
B)The company operated at more or less units of production activity than expected during the period.
C)Actual activity equaled the volume used to establish the overhead cost per unit.
D)The company purchased more or less materials for production than the amount used.

Question

Quizplus · Accepted Answer

Volume variance arises when the actual production activity level deviates from the budgeted level. This deviation can result in either favorable or unfavorable volume variances. Choices A, C, and D relate to different types of cost variances, not volume variance.

For Which of the Following Reasons Does the Volume Variance