Chapter 21, Problem 5MCQ

To determine

Fixed Overhead:

Fixed overheads are those costs which do not change with the change in the production. Whether the production is 0 or 100 fixed overheads will remain the same. Fixed overheads are stagnant in nature in short term but in the long run they also start varying with the change in production.

Fixed Overhead Volume Variance:

Fixed overhead volume variance is the variation in budgeted fixed overhead for production and fixed overhead actually applied to production.

To identify: The correct option.