The production-volume variance, which relates only to fixed manufacturing overhead, exists under absorption costing but not under variable costing.

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The production-volume variance is a difference between the budgeted fixed overhead and the actual fixed overhead incurred due to the difference in the number of units produced. Since fixed manufacturing overhead is included in the cost of goods sold under absorption costing but not under variable costing, the production-volume variance exists only under absorption costing.

The Production-Volume Variance, Which Relates Only to Fixed Manufacturing Overhead