In a two-variance system for analyzing factory overhead,a favorable production-volume variance could be caused by:

Question

Quizplus · Accepted Answer

A favorable production-volume variance means that the actual number of units produced exceeded the expected number of units, resulting in lower overhead costs per unit. Receiving more orders than anticipated would lead to an increase in production, which can result in a favorable production-volume variance. The other options are not directly related to production volume and would not lead to this type of variance.

In a Two-Variance System for Analyzing Factory Overhead,a Favorable Production-Volume