In a standard cost system, when production (i.e., actual output) is greater than the denominator volume level, there will be:
A) A favorable labor efficiency variance.
B) An unfavorable total spending variance.
C) A favorable production-volume variance.
D) A favorable sales-volume variance.
E) A favorable overhead budget variance.

Question

Quizplus · Accepted Answer

A favorable production-volume variance occurs when actual output is greater than the denominator volume level. This variance reflects the savings achieved by producing at a higher volume than expected, which results in lower fixed costs per unit of output.

In a Standard Cost System, When Production (I