The production-volume variance only exists under absorption costing and not under variable costing.

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Quizplus · Accepted Answer

The production-volume variance is a difference between the budgeted overhead cost and the overhead cost applied based on the actual production volume. This variance only occurs under absorption costing, as the fixed overhead cost is included in the inventory value and only expensed when the inventory is sold. Under variable costing, the fixed overhead cost is expensed as incurred and is not included in the inventory value, so there is no production-volume variance.

The Production-Volume Variance Only Exists Under Absorption Costing and Not