Because fixed overhead is 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 unfavorable.
D) a line by line comparison of budgeted costs with actual costs provides more information.
E) All of these.

Question

Quizplus · Accepted Answer

A line by line comparison of budgeted costs with actual costs provides more detailed information about the different components of fixed overhead costs, allowing for targeted analysis and potential improvement. The fixed overhead spending variance may still be meaningful as an overall measure of cost variation, and it is possible to calculate a fixed overhead volume variance that reflects changes in production activity. However, due to the complexity of fixed overhead, a detailed comparison is likely the most informative approach.

Because Fixed Overhead Is Made Up of Many Items