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The difference between budgeted fixed manufacturing overhead and the fixed overhead applied to production is the:...

The difference between budgeted fixed manufacturing overhead and the fixed overhead applied to production is the: Select one: a. sum of the spending and efficiency variances. b. efficiency variance. c. spending variance. d. volume variance. e. controllable variance.

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Answer #1

Answer: Option d. volume variance

The volume variance is the difference between the budgeted fixed overheads and the fixed overheads applied to production.

The sum of the spending and efficiency variances is the total variable overhead variance and hence option a. is incorrect.

Efficiency variance is computed for variable overheads and not fixed overheads hence, option b. is incorrect.

Spending variance for fixed overheads is the difference between the actual overheads and the budgeted overheads hence, option c. is incorrect.

A controllable variance is a variance that is not affected due to change in volumes and hence option e is incorrect.

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