A fixed manufacturing overhead budget variance occurs as the result of a difference between the denominator level of activity (in hours)and the standard hours allowed for the actual output of the period.

Question

Quizplus · Accepted Answer

A fixed manufacturing overhead budget variance occurs due to the difference between the actual fixed overhead costs and the budgeted (or standard) fixed overhead costs, not due to the difference in activity levels or standard hours allowed for actual output.

A Fixed Manufacturing Overhead Budget Variance Occurs as the Result