The difference between budgeted fixed factory overhead for a period and the amount of fixed factory overhead applied to production during the period is the:
A) Fixed factory overhead efficiency variance.
B) Fixed factory overhead production-volume variance.
C) Fixed factory overhead spending variance.
D) Fixed factory overhead sales-volume variance.
E) Fixed factory overhead flexible budget variance.

Question

Quizplus · Accepted Answer

The difference between budgeted fixed factory overhead for a period and the amount of fixed factory overhead applied to production during the period is known as the fixed factory overhead production-volume variance. This variance measures the effect of the actual production volume being different from the expected (budgeted) production volume on the allocation of fixed overhead costs.

The Difference Between Budgeted Fixed Factory Overhead for a Period