The fixed overhead volume variance is calculated by taking the difference between:
A) actual fixed overhead and budgeted fixed overhead.
B) budgeted fixed overhead and budgeted variable overhead.
C) budgeted fixed overhead and applied fixed overhead.
D) actual fixed overhead and applied fixed overhead.

Question

Quizplus · Accepted Answer

The fixed overhead volume variance measures the difference between the budgeted fixed overhead and the applied fixed overhead. This variance indicates whether the actual production level was more or less than the planned production level, which can impact fixed overhead costs such as rent, insurance, and depreciation. Therefore, the correct option is C.

The Fixed Overhead Volume Variance Is Calculated by Taking the Difference