volume (production volume) variance Definition | Business Dictionaries from AllBusiness.com
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Business Glossary


Business Definition for: volume (production volume) variance
volume (production volume) variance

amount of under- or overapplied fixed factory overhead. It is the difference between budgeted fixed factory overhead and the amount applied based on a predetermined rate and the standard input allowed for actual output. It measures the use of capacity rather than specific cost outlays.

See also idle capacity variance , fixed overhead volume (denominator) variance
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