The fixed overhead volume variance is due to:
A) inefficient or efficient use of whatever the denominator activity is.
B) inefficient or efficient use of overhead resources.
C) a difference between the denominator activity and the standard hours allowed for the actual output of the period.
D) a shift in the amount of hours required to produce the actual output.

Question

Quizplus · Accepted Answer

The fixed overhead volume variance is calculated based on the difference between the denominator activity (such as machine hours or labor hours) and the standard hours allowed for the actual output of the period. It represents the effect of using a different level of activity than anticipated for the actual production. It is not related to the efficiency of overhead resources or the amount of hours required to produce the output, which are covered by other variances.

The Fixed Overhead Volume Variance Is Due To