(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 there is a fixed manufacturing overhead budget variance.

Question

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A fixed manufacturing overhead volume variance will only occur when the actual activity level differs from the budgeted activity level. A fixed manufacturing overhead budget variance will occur when the actual fixed manufacturing overhead costs differ from the budgeted fixed manufacturing overhead costs. These two variances are independent of each other.

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