ECONOMICS

Detailed explanation-1: -Fixed manufacturing overhead variance analysis involves two separate variances: the spending variance and the production volume variance.

Detailed explanation-2: -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-3: -What is the Fixed Overhead Spending Variance? The fixed overhead spending variance is the difference between the actual fixed overhead expense incurred and the budgeted fixed overhead expense. An unfavorable variance means that actual fixed overhead expenses were greater than anticipated.