The difference between budgeted fixed manufacturing overhead and the fixed manufacturing overhead allocated to actual output units achieved is called
A)an efficiency variance.
B)a flexible-budget variance.
C)a manufacturing overhead flexible-budget variance.
D)a production-volume overhead variance.
E)an unallocated variable cost.

Question

Quizplus · Accepted Answer

The difference between budgeted fixed manufacturing overhead and the fixed manufacturing overhead allocated to actual output units achieved is called a production-volume overhead variance. This variance measures the impact of changes in production volume on fixed overhead costs. A higher-than-expected production volume results in a favorable variance, while a lower-than-expected production volume results in an unfavorable variance.

The Difference Between Budgeted Fixed Manufacturing Overhead and the Fixed