A fixed overhead volume variance:
A)Is prorated to Work in process, Finished Goods, and Cost of Goods Sold if it is a material amount
B)Is always closed only to Cost of Goods Sold, even if it is a material amount
C)Occurs when actual selling and administrative costs are different than allocated selling and administrative costs
D)Occurs when actual fixed overhead costs are not identical to budgeted overhead costs

Question

Quizplus · Accepted Answer

A fixed overhead volume variance is prorated to Work in Process, Finished Goods, and Cost of Goods Sold if it is a material amount, as it reflects the difference between the budgeted and actual production levels affecting inventory and cost of goods sold.

A Fixed Overhead Volume Variance