Question

The overhead volume variance helps to control overhead expense (true or false)

A) True
B) False

Answer 1

The overhead volume variance is true to help control overhead expense as it identifies the difference between the budgeted and actual overhead costs, guiding cost control strategies.

Step-by-step explanation:

The statement 'The overhead volume variance helps to control overhead expense' is true. Overhead volume variance is used to measure the difference between the budgeted overhead costs based on standard hours and the actual overhead costs incurred due to the actual hours worked.

This variance is crucial for managers because it allows them to identify whether the company is spending more or less on overheads than planned. If the variance is significant, it prompts a review of operations to identify inefficiencies and areas for cost control.