The total fixed overhead variance is comprised of the
A) variable overhead efficiency and fixed variances.
B) fixed overhead budget and volume variances.
C) labor efficiency and rate variances.
D) variable overhead spending and efficiency variances.

Question

Quizplus · Accepted Answer

The total fixed overhead variance is composed of two components: fixed overhead budget variance and fixed overhead volume variance. The fixed overhead budget variance is the difference between the actual fixed overhead costs and the budgeted fixed overhead costs, whereas the fixed overhead volume variance is caused by the difference between the budgeted fixed overhead cost and the actual fixed overhead cost that should have been incurred based on the actual level of activity. The other options (A, C, D) are incorrect because they refer to different types of variances.

The Total Fixed Overhead Variance Is Comprised of the