Which of the following values is used in the calculations for both the controllable overhead variance and the overhead volume variance?
A)Overhead applied to production using the predetermined overhead rate
B)Flexible budget level of overhead for the actual level of production
C)Actual overhead incurred
D)None of these answer choices are used in both calculations.

Question

Quizplus · Accepted Answer

The flexible budget level of overhead for the actual level of production is used in both the controllable overhead variance and the overhead volume variance calculations. The controllable overhead variance compares actual overhead incurred to the flexible budget amount, while the overhead volume variance compares the flexible budget amount to the standard amount allowed for the actual level of production. Neither the overhead applied to production nor the actual overhead incurred are used in both calculations.

Which of the Following Values Is Used in the Calculations