Which of the following variance(s)is(are)computed for fixed overhead costs?
A) production volume variance
B) flexible budget variance
C) efficiency variance
D) production volume variance and flexible budget variance

Question

Quizplus · Accepted Answer

Fixed overhead costs are usually planned based on a certain level of production volume. Therefore, comparing the actual production volume with the planned volume can reveal a production volume variance. Additionally, comparing the actual fixed overhead costs with the flexible budget for the actual volume can reveal a flexible budget variance. Therefore, both production volume variance and flexible budget variance can be computed for fixed overhead costs. The efficiency variance is typically computed for variable costs, not fixed overhead costs.

Which of the Following Variance(s)is(are)computed for Fixed Overhead Costs