Managerial Accounting, v1.0: "Chapter 10, Section 8: Fixed Manufacturing Overhead Variance Analysis"

Recall that fixed overhead in the Master Budget is the same as fixed overhead in the Flexible Budget because, fixed costs do not change with changes in units produced. Fixed manufacturing overhead variance analysis involves two separate variances: the spending variance and the production volume variance.  This unit applies this management measure to Jerry’s Ice Cream. Calculating the two variances informs management if they are applying enough overhead to the operation.