A favourable production-volume variance indicates that the company
A)has good management.
B)produced more than it has sold.
C)has a total economic gain from using excess capacity.
D)should increase capacity.
E)has allocated more fixed overhead costs than budgeted.

Question

Quizplus · Accepted Answer

A favourable production-volume variance occurs when the actual production exceeds the budgeted production, leading to more fixed overhead costs being allocated than initially budgeted.

A Favourable Production-Volume Variance Indicates That the Company