If the actual volume of production differs from the expected volume of production,the fixed overhead costs used for budgeting and product costing are ________.
A) the same
B) different
C) indeterminate
D) changing over the accounting period

Question

Quizplus · Accepted Answer

When the actual volume of production differs from the expected volume of production, the fixed overhead costs used for budgeting and product costing will be different because fixed overhead costs do not change with changes in production volume. Therefore, if the actual production volume is higher or lower than the expected volume, the fixed overhead costs will need to be adjusted accordingly to reflect the actual costs incurred.

If the Actual Volume of Production Differs from the Expected