The difference between the total budgeted fixed overhead cost and the fixed overhead applied to production using the predetermined overhead rate is the:
A) Production variance.
B) Volume variance.
C) Overhead cost variance.
D) Quantity variance.
E) Controllable variance.

Question

Quizplus · Accepted Answer

The difference between the total budgeted fixed overhead cost and the fixed overhead applied to production using the predetermined overhead rate is known as the volume variance. This variance occurs because the actual production volume differs from the expected (or standard) production volume used to calculate the predetermined overhead rate.

The Difference Between the Total Budgeted Fixed Overhead Cost and the Fixed