For what reason(s) might the overhead volume variance occur?
I.Overhead cost control is poor.
II.The actual activity level was less than estimated.
III.The expected production level was greater than budgeted.
A)I and II
B)II and III
C)I and III
D)I, II, and III

Question

Quizplus · Accepted Answer

The overhead volume variance occurs when the actual activity level is less than estimated, and/or the expected production level was greater than budgeted. It is not directly related to poor overhead cost control, which would be reflected in a different variance. Therefore, choices II and III are correct while choice I is incorrect. Therefore, option B is the best choice.

For What Reason(s) Might the Overhead Volume Variance Occur