Which variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity?
A) The variable-overhead spending variance.
B) The variable-overhead efficiency variance.
C) The fixed-overhead budget variance.
D) The fixed-overhead volume variance.
E) The total fixed-overhead variance.

Question

Quizplus · Accepted Answer

The fixed-overhead volume variance measures the cost impact of operating at a level of activity different from the expected capacity, reflecting under- or over-utilization of plant capacity.

Which Variance Is Commonly Associated with Measuring the Cost of Under-