Which variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity?
A)The variable-overhead spending variance.
B)The variable-overhead eﬃciency variance.
C)The ﬁxed-overhead budget variance.
D)The ﬁxed-overhead volume variance.
E)The total ﬁxed-overhead variance.

Question

Quizplus · Accepted Answer

The fixed-overhead volume variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity. This variance measures the difference between the budgeted fixed overhead and the actual fixed overhead based on the level of activity. If the actual volume of production differs from the budgeted volume, this variance will occur.

Which Variance Is Commonly Associated with Measuring the Cost of Under-