ECONOMICS

Detailed explanation-1: -An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work. Favorable volume variances are never harmful, since achieving them encourages managers to run the factory above normal capacity.

Detailed explanation-2: -An unfavorable volume variance indicates that the amount of fixed manufacturing overhead costs applied (or assigned) to the manufacturer’s output was less than the budgeted or planned amount of fixed manufacturing overhead costs for the same time period.

Detailed explanation-3: -When actual production is lower than budgeted production, production volume variance is unfavorable.

Detailed explanation-4: -An unfavorable fixed overhead budget variance results when the actual amount spent on fixed manufacturing overhead costs exceeds the budgeted amount.

Detailed explanation-5: -A budget variance is an accounting term that describes instances where actual costs are either higher or lower than the standard or projected costs. An unfavorable, or negative, budget variance is indicative of a budget shortfall, which may occur because revenues miss or costs come in higher than anticipated.