Because it is a volume variance,the fixed overhead volume variance explains why fixed overhead is underallocated or overallocated.

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Quizplus · Accepted Answer

The fixed overhead volume variance is a measure of the difference between the actual fixed overhead incurred and the budgeted fixed overhead based on the standard hours allowed for the production output. This variance compares the actual level of activity with the budgeted level of activity and explains why fixed overhead is either underallocated or overallocated as a result of the difference. Therefore, the statement is true.

Because It Is a Volume Variance,the Fixed Overhead Volume Variance