Question

An unfavorable​ production-volume variance​ ________. A. is not a good measure of a lost production opportunity B. indicates that the company had reduced its per unit fixed overhead cost to improve sales C. takes into account the effect of additional revenues due to maintaining higher prices D. measures the amount of extra fixed costs planned for but not used

Answer 1

d) measures the amount of extra fixed costs planned for but not used

Step-by-step explanation:

An unfavorable​ production-volume variance measures the amount of extra fixed costs planned for but not used. As per production-volume variance extra fixed costs planned for but not used has unfavorable production-volume variance.

When production-volume variance is unfavorable, that means the fixed cost are allocated on lesser number of manufactured units, hence it indicates that the fixed costs are not controlled well.