The fixed manufacturing overhead budget variance and the fixed manufacturing overhead volume variance taken together explain the difference between the actual fixed manufacturing overhead cost incurred and the fixed manufacturing overhead cost applied to production.

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The fixed manufacturing overhead budget variance measures the difference between the actual fixed overhead costs and the budgeted fixed overhead costs, while the fixed manufacturing overhead volume variance measures the difference between the budgeted fixed overhead costs and the overhead costs that would have been incurred if production had been at the budgeted level. Together, these variances explain the difference between the actual fixed overhead costs incurred and the fixed overhead costs applied to production.

The Fixed Manufacturing Overhead Budget Variance and the Fixed Manufacturing