(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 the fixed manufacturing overhead applied to units of product on the basis of standard hours allowed differs from the budgeted fixed manufacturing overhead.

Question

Quizplus · Accepted Answer

A fixed manufacturing overhead volume variance occurs when there is a difference between the budgeted fixed overhead and the applied fixed overhead based on standard hours allowed, indicating that the actual production level was different from the expected level.

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