Standard variable overhead rate $2 per machine hour Standard fixed overhead rate $1 per machine hour Actual variable overhead costs $390,000 Actual fixed overhead costs $175,000 Budgeted fixed overhead costs $190,000 Standard machine hours per unit produced 10 Good units produced 18,000 Actual machine hours 200,000 Using the above information provided for Underfoot Products, compute the fixed overhead budget variance.

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Business

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20 June, 19:07

Standard variable overhead rate $2 per machine hour Standard fixed overhead rate $1 per machine hour Actual variable overhead costs $390,000 Actual fixed overhead costs $175,000 Budgeted fixed overhead costs $190,000 Standard machine hours per unit produced 10 Good units produced 18,000 Actual machine hours 200,000 Using the above information provided for Underfoot Products, compute the fixed overhead budget variance.

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Hans · Answer 1

Fixed overhead budget variance = $15,000 favorable

Explanation:

The fixed overhead budget variance is the difference between the budgeted fixed overhead expenditure and the actual fixed overhead for a given period of time.

Where the actual amount of expenditure exceeds the budgeted it is unfavorable variance, a favorable variance implies the opposite.

$

Budgeted fixed overhead 190,000

Actual fixed overhead 175,000

Budget Variance 15,000 favorable

Fixed overhead budget variance = $15,000 favorable