The fixed overhead volume variance is calculated by taking the difference between:
A) actual fixed overhead and budgeted fixed overhead.
B) budgeted fixed overhead and budgeted variable overhead.
C) budgeted fixed overhead and applied fixed overhead.
D) budgeted fixed overhead per the flexible budget and budgeted fixed overhead per the static budget.

Question

Quizplus · Accepted Answer

The fixed overhead volume variance is the difference between the budgeted fixed overhead and the applied fixed overhead. It measures the effect of the difference between the budgeted and actual production volume on fixed overhead costs. Therefore, choice C is the correct answer. The other choices do not accurately describe the fixed overhead volume variance.

The Fixed Overhead Volume Variance Is Calculated by Taking the Difference