A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours.A fixed manufacturing overhead volume variance will necessarily occur in a month in which there is a fixed manufacturing overhead budget variance.

Question

Quizplus · Accepted Answer

A fixed manufacturing overhead volume variance occurs when there is a difference between the budgeted and actual production levels, not necessarily when there is a budget variance. A budget variance is the difference between budgeted and actual costs, which can occur independently of production levels.

A Company Has a Standard Cost System in Which Fixed