The following data apply to Walker Corporation for the year 20X4.

-When actual volume is less than expected volume, fixed overhead is
A) favourable.
B) underapplied.
C) overapplied.
D) indeterminable.

Question

The following data apply to Walker Corporation for the year 20X4.
 
-When actual volume is less than expected volume, fixed overhead is
A) favourable. 
B) underapplied. 
C) overapplied. 
D) indeterminable.

Quizplus · Accepted Answer

When actual volume is less than expected volume, fixed overhead is underapplied. This means that the amount of fixed overhead incurred is less than the amount that should have been incurred based on the expected volume.

The Following Data Apply to Walker Corporation for the Year