What is one of the results of fixed overhead being made up of many items?
A) The fixed overhead spending variance is not meaningful.
B) It is not possible to calculate a fixed overhead volume variance.
C) The fixed overhead volume variance will always be unfavourable.
D) A line-by-line comparison of budgeted costs with actual costs provides more information.

Question

Quizplus · Accepted Answer

A line-by-line comparison of budgeted costs with actual costs provides more information when fixed overhead is made up of many items. This allows for identifying which specific items caused variances, rather than relying on overall variances that may not be meaningful. While it is still possible to calculate a fixed overhead volume variance, it may not provide much insight if the fixed overhead consists of many different items.

What Is One of the Results of Fixed Overhead Being