A fixed-overhead volume variance would normally arise when:
A)actual hours of activity coincide with actual units of production.
B)budgeted fixed overhead is less than (or greater than)applied fixed overhead.
C)there is a fixed-overhead budget variance.
D)actual fixed overhead exceeds budgeted fixed overheaD.
E)there is a variable-overhead efficiency variancE.
Overapplied overhead can also be the result of a budget variancE.

Question

Quizplus · Accepted Answer

A fixed-overhead volume variance occurs when the actual units of production differ from the budgeted units of production, resulting in a difference between the applied fixed overhead and the actual fixed overhead. Therefore, if the budgeted fixed overhead is less than or greater than the applied fixed overhead, it would result in a fixed-overhead volume variance.

Option A is incorrect because actual hours of activity coinciding with actual units of production would result in no variance.

Option C is incorrect because a fixed-overhead budget variance occurs when the actual fixed overhead differs from the budgeted fixed overhead.

Option D is incorrect because it refers to an overapplied fixed overhead variance, which is not necessarily related to the fixed-overhead volume variance.

Option E is incorrect because it refers to a variable-overhead efficiency variance, which is a separate variance from the fixed-overhead volume variance.

A Fixed-Overhead Volume Variance Would Normally Arise When