The volume variance is caused by:
A)the difference between the activity allowed for the actual output and the budgeted activity used in computing the fixed overhead rate.
B)the difference between total budgeted fixed overhead and total standard fixed overhead assigned to production.
C)the difference between the activity allowed for the actual output and the total standard fixed overhead assigned to production.
D)the difference between the standard fixed overhead rate and the actual fixed overhead rate.

Question

Quizplus · Accepted Answer

The volume variance is caused by the difference between the activity allowed for the actual output and the budgeted activity used in computing the fixed overhead rate. This means that the actual level of activity was different from the expected level of activity used in setting the fixed overhead rate, leading to a difference in the amount of fixed overhead applied to production.

The Volume Variance Is Caused By