Final answer:
In a manufacturing company, there would be no fixed manufacturing overhead volume variance under a variable costing system, as it only includes variable costs in product pricing and does not allocate fixed overhead costs to products, unlike traditional absorption costing.
Step-by-step explanation:
The student is asking about a situation in a manufacturing company where there would be no fixed manufacturing overhead volume variance. This occurs under a product costing system known as variable costing or direct costing. Under variable costing, only variable manufacturing costs are assigned to products. Since fixed manufacturing overhead costs are not allocated to products on a per-unit basis, there would be no volume variance associated with fixed overhead under this costing method.
In contrast, a traditional absorption costing system assigns both variable and fixed manufacturing overhead costs to products. Consequently, when production volume varies from the expected level, a fixed manufacturing overhead volume variance arises. This variance reflects the under- or over-applied fixed manufacturing overhead due to differences between the actual and budgeted production levels.