Assume the company uses a standard cost accounting system. Which of the following statements regarding fixed manufacturing overhead variances is true?

The fixed manufacturing overhead budget variance is the difference between the actual fixed overhead costs incurred and the amount of fixed overhead costs applied to work in process inventory.

The fixed manufacturing overhead budget variance is caused by the difference between the standard hours allowed for the actual level of production and the standard hours allowed for the budgeted level of production.

If the actual fixed manufacturing overhead costs exceed the budgeted fixed manufacturing overhead costs for the year, then fixed overhead costs must be underapplied for the year.

The fixed manufacturing overhead volume variance is favorable if the amount of fixed overhead costs applied to work in process inventory is greater than the budgeted fixed overhead costs.

None of the above statements is true.