(Appendix 11A)A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours.A fixed manufacturing overhead volume variance will NOT necessarily occur in a month in which production volume differs from sales volume.

Question

Quizplus · Accepted Answer

The fixed manufacturing overhead volume variance is the difference between the budgeted fixed overhead and the fixed overhead applied to production based on the standard direct labor-hours. It only occurs when the production volume differs from the budgeted level, not necessarily from the sales volume. Therefore, the statement is true.

(Appendix 11A)A Company Has a Standard Cost System in Which