What Does an Unfavorable Overhead Volume Variance Indicate

question 104

Multiple Choice

What does an unfavorable overhead volume variance indicate?

• A)The quantity of production was less than what was anticipated.
• B)The company spent more costs on overhead than expected.
• C)Production took longer than expected.
• D)The company produced more units than it budgeted.

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Definitions:

Fixed Portion

The segment of total costs that does not change with changes in the activity level.

Cost Behavior

Describes how various production expenses vary with adjustments in production output.

Fixed Costs

Expenses that do not vary with production volume, such as rent, salaries, and insurance.

Cost Per Unit

A measure of the cost incurred in the production, creation, or acquisition of a single unit of a product or service.