If a company is operating at a capacity below its normal capacity in units,the fixed overhead volume variance will be favorable.

Name: If a company is operating at a capacity below its normal capacity in units,the fixed overhead volume variance will be favorable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The fixed overhead volume variance is unfavorable when a company operates below its normal capacity because it indicates that the company has not utilized its fixed resources efficiently, leading to higher per-unit costs.

If a Company Is Operating at a Capacity Below Its