When actual capacity exceeds expected capacity,the result is a(n)
A)favorable fixed overhead volume variance.
B)favorable materials quantity variance.
C)unfavorable overhead variance.
D)unfavorable materials quantity variance.

Question

Quizplus · Accepted Answer

When actual capacity exceeds expected capacity, it means that more units can be produced with the same fixed overhead cost, which leads to a favorable fixed overhead volume variance. Therefore, option A is the best choice. Option B is incorrect because it refers to materials quantity variance which is not relevant to the given scenario. Option C is incorrect because it mentions unfavorable overhead variance which is not necessarily true when actual capacity exceeds expected capacity. Option D is also incorrect for the same reason as B.

When Actual Capacity Exceeds Expected Capacity,the Result Is A(n)