The Fixed Overhead Volume Variance Shows Why the Fixed Overhead

question 42

True/False

The fixed overhead volume variance shows why the fixed overhead is underallocated or overallocated because it is a cost variance.

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Definitions:

Withdrawals

Amounts of money taken out from a business by its owner(s) for personal use, not considered business expenses.

Credit Side

The right side of an accounting ledger where increases in liabilities, equity, and income or decreases in assets and expenses are recorded.

Equipment

Tangible property used in the operation of a business that is not intended for sale, typically having a useful life longer than one year.

Credit Side

The right side of a financial ledger, where increases in liabilities, equity, and revenue, and decreases in assets and expenses are recorded.