An unfavorable production-volume variance ________.
A) is not a good measure of a lost production opportunity
B) indicates that the company had reduced its per unit fixed overhead cost to improve sales
C) measures the amount of extra fixed costs planned for but not used
D) takes into account the effect of additional revenues due to maintaining higher prices

Question

Quizplus · Accepted Answer

An unfavorable production-volume variance occurs when a company incurs fixed costs for a level of production that it does not achieve. This means the company planned for a certain level of production (and the associated fixed costs) but did not utilize those resources fully, leading to extra fixed costs that were planned for but not used.

An Unfavorable Production-Volume Variance ________