In overhead cost variance analysis, the variable overhead does not include _____________?
Correct answer: D. production volume varianceFinance
- A. favorable volume variance
- B. profit volume variance
- C. cost volume variance
- D. production volume varianceFinance
Explanation
Production volume variance belongs to fixed overhead because it results from producing at a level different from the denominator activity. Variable overhead is normally analysed through spending and efficiency variances instead.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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