Manufacturing
Fixed Overhead Volume Variance
Adjusting for the 'under-utilization' of the factory's capacity.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Fixed OH Volume Variance (Unfavorable) | Expense (+) | 300.00 | - |
| Manufacturing Overhead (Applied) | Contra-Expense (+) | - | 300.00 |
💡 Accountant's Note
If you built a factory for 10,000 units but only made 8,000, your 'fixed cost per unit' is too high. This variance highlights that idle capacity cost.
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