Question

A company uses a two-variance analysis for overhead variances, controllable and volume. The volume variance is based on the: Group of answer choices

a. Fixed overhead application rate.
b. Volume of total expenses at various activity levels.
c. Variable overhead application rate.
d. Total overhead application rate.

Answer 1

A. Fixed overhead application rate.

Step-by-step explanation:

A fixed overhead variance that represents the difference between budgeted fixed overhead and fixed overhead applied to production of the period; is also referred to as the non-controllable variance.