A favorable fixed overhead volume variance for a manufacturing company could indicate
A) the creation of excess inventory.
B) the actual overhead exceeded the budgeted overhead.
C) sales exceeded production.
D) variable overhead costs were less than fixed overhead costs.

Question

Quizplus · Accepted Answer

A favorable fixed overhead volume variance indicates that the company produced more units than expected, which could lead to the creation of excess inventory if sales do not match the increased production.

A Favorable Fixed Overhead Volume Variance for a Manufacturing Company