ECONOMICS

Detailed explanation-1: -Fixed overhead volume variance is the difference between the amount budgeted for fixed overhead costs based on production volume and the amount that is eventually absorbed. This variance is reviewed as part of the cost accounting reporting package at the end of a given period.

Detailed explanation-2: -The fixed overhead volume variance is the difference between the amount of fixed overhead actually applied to produced goods based on production volume, and the amount that was budgeted to be applied to produced goods. This variance is reviewed as part of the period-end cost accounting reporting package.

Detailed explanation-3: -Fixed Overhead Volume Variance = Applied Fixed Overheads – Budgeted Fixed Overhead. Here, Applied Fixed Overheads = Standard Fixed Overheads × Actual Production. Standard Fixed Overheads = Budgeted Fixed Overheads ÷ Budgeted Production.

Detailed explanation-4: -Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period? fixed overhead volume variance.