Why do fixed manufacturing cost variances occur?
A)Managers do not correctly anticipate changes in wage rates.
B)Poor materials are used in production.
C)Supervisors encounter scheduling problems.
D)Actual fixed costs differ from budgeted fixed costs.

Question

Quizplus · Accepted Answer

Fixed manufacturing cost variances occur when actual fixed costs differ from budgeted fixed costs. This can happen due to changes in market conditions, inflation, unexpected maintenance expenses, or any other factors that affect fixed costs. Managers cannot control all of these factors, but they need to monitor and analyze the variances to adjust budgets and make decisions accordingly. A, B, and C are incorrect because these factors may cause other types of variances but not specifically fixed manufacturing cost variances.

Why Do Fixed Manufacturing Cost Variances Occur