A company uses a two-variance analysis for overhead variances, flexible-budget and production-
volume. The production-volume variance is the difference between the factory overhead applied
at standard and:
a.
Total factory overhead per the flexible budget.
b.
Actual factory overhead incurred.
c.
Total factory overhead per the master budget.
d.
Fixed overhead incurred.
a. Total factory overhead per the flexible budget.
b. Actual factory overhead incurred.
c. Total factory overhead per the master budget.
d. Fixed overhead incurred.
Solution
A company uses a two-variance analysis for overhead variances, flexible-budget and production-
volume. The production-volume variance is the difference between the factory overhead applied
at standard and:
c.Total factory overhead per the master budget.
Note : Production-volume variance = Budgeted factory Overhead - Standard Factory Overhead at
actual output