Final answer:
The correct statement regarding fixed overhead variances is (A) The difference between actual costs and static budget costs will give the production volume variance. Fixed costs remain constant regardless of production levels, and the production volume variance identifies the impact of actual production on these fixed costs.
Step-by-step explanation:
The student's question pertains to the concept of fixed overhead variances, which involves analyzing differences related to a company's fixed overhead costs in managerial accounting. Focusing on the correct statement among the given options, we can understand that fixed overhead variances involve both the differences between actual and budgeted costs, as well as differences related to production volumes. Fixed costs, as the name suggests, do not vary with the level of production; they remain constant regardless of the production level, including when there is zero production. Examples include rent for factory space, machinery costs, and research and development expenses.
Among the statements provided to the student, the correct one is (A) The difference between actual costs and static budget costs will give the production volume variance. This is because the production volume variance is calculated to determine how fixed costs have been affected by the actual production volume versus the anticipated (budgeted) production volume. Statements B, C, and D contain inaccuracies concerning how variances are calculated and the relationship between actual, static, and flexible budget costs.