Question

If the production exceeds anticipated production, the overhead volume variance is unfavorable (true or false)

A) True
B) False

Answer 1

The overhead volume variance is unfavorable when the production exceeds anticipated production.

Step-by-step explanation:

True

The overhead volume variance is unfavorable when the production exceeds anticipated production. This means that the actual production level is higher than expected, resulting in higher overhead costs.

The unfavorable variance indicates that resources were not efficiently utilized and additional costs were incurred.

For example, if a company had anticipated producing 100 units but actually produced 120 units, the overhead costs would be higher than budgeted, leading to an unfavorable variance.