The Fixed Overhead Volume Variance Is a Cost Variance That

question 24

True/False

The fixed overhead volume variance is a cost variance that explains why fixed overhead is overallocated or underallocated.

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Definitions:

Direct Materials

Raw materials that can be directly traced to a finished product and are a part of the manufacturing process.

Price Variance

The difference between the actual cost of a good or service and its expected cost, often used in budgeting and financial analysis.

Labor Price Variance

The difference between the actual cost of labor and the standard cost expected for that labor, used in budgeting and cost management.

Quantity Variance

Quantity variance refers to the difference between the expected and actual quantity of materials or inputs used in the production process, impacting cost.