"The smoke is coming from the volcano."
Translation:Røyken kommer fra vulkanen.
I'd say that as a casual comment about smoke, røyken kommer fra vulkanen, would be the most common phrase.
With røyken kommer ut av vulkanen I get the feel that any mountain is actually a volcano and has smoke inside just waiting to get out.
I can imagine certain dialects (especially up North) where Røyken kommer ut av/i fra vulkanen would be just as common, but that is also because those prepositions (av, fra, ut av, i fra) gets used a bit differently, at least colloquially. But they wouldn't claim they spoke bokmål either.