Fixed overhead volume variance
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Fixed overhead volume variance this variance is the difference between the budgeted fixed overhead and the standard fixed overhead cost allocated to production. In essence, the fixed overhead volume variance measures the utilization of the fixed capacity costs. If volume is higher than originally anticipated, the variance will be favorable. If volume is lower than originally anticipated, the variance will be unfavorable.
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Fixed overhead volume variance. This variance is the difference between the budgeted fixed overhead and the standard fixed overhead cost allocated to production. In essence, the fixed overhead volume variance measures the utilization of the fixed capacity costs. If volume is higher than originally anticipated, the variance will be favorable. If volume is lower than originally anticipated, the variance will be unfavorable.
