Overhead variances are due to differences between the actual overhead costs incurred and the overhead applied to production. The overhead controllable variance equals the actual overhead minus the budgeted overhead. The volume variance equals the budgeted fixed overhead minus the applied fixed overhead.

Knowledge Check $01$

A Min Company operates at $80\%$ capacity. At this level, they produce $1,000$ units, total overhead costs are $$15,000,$ and they predict they will use $10,000$ direct labor hours.