When the actual volume of production exceeds the expected volume of production,the production volume variance is ________ and fixed overhead is ________.
A) favorable; underapplied
B) favorable; overapplied
C) unfavorable; underapplied
D) unfavorable; overapplied

Question

Quizplus · Accepted Answer

When the actual volume of production exceeds the expected volume of production, the production volume variance is favorable because more units were produced than anticipated. Fixed overhead is overapplied because the actual fixed overhead cost is incurred for a larger volume of production than expected.

When the Actual Volume of Production Exceeds the Expected Volume