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Volume variance is nonzero when there is a difference between the actual level of production achieved and the expected or budgeted level of production. This occurs when actual sales volume deviates from the planned sales volume, leading to changes in fixed costs allocated per unit. If the actual output is greater or less than what was anticipated, the fixed costs per unit will differ, resulting in a volume variance.

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Related Questions

What is the difference between negative price variance and volume variance?

Negative price variance is when the cost is less than budgeted. Volume variance is a variance in the volume produce.


Is the volume variance a controllable variance from a spending point of view?

No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume. No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume.


What are the variances in a 4 variance analysis?

efficiency variance, spending variance, production volume variance, variable and fixed components


What causes a volume variance?

a + or a-


Is there any difference between sales volume variance and Sales Quantity Variance?

Yes


If the controllable overhead variance is favorable the overhead volume variance?

volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.


What is the difference between a sales volume variance and a sales price variance?

Volume is a change in how many products you sell Price is a change in how much you charge for the product


Is the materials price variance the least significant from a standpoint of cost control?

NO - Fixed Overhead Volume Variance


How do you calculate production volume variance?

Production volume variance is calculated by taking the difference between the actual production volume and the budgeted production volume, then multiplying that difference by the standard fixed overhead rate per unit. The formula is: [ \text{Production Volume Variance} = (\text{Actual Units Produced} - \text{Budgeted Units}) \times \text{Standard Fixed Overhead Rate per Unit} ] This variance helps to assess how well the actual production aligns with planned production levels and the impact on fixed overhead costs.


What is sales volume contribution variance?

extrax standard contribution per


A favorable fixed overhead volume variance occurs if?

Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.


Is idle capacity variance due to an increase or decrease in the volume of production?

"http://wiki.answers.com/Q/Is_idle_capacity_variance_due_to_an_increase_or_decrease_in_the_volume_of_production" "http://wiki.answers.com/Q/Is_idle_capacity_variance_due_to_an_increase_or_decrease_in_the_volume_of_production"