R&N Manufacturing produces music boxes.The fixed overhead rate is $5.10 per direct labor hour, and the company budgeted for 4,400 direct labor hours for the year.During the year, R&N produced 2,500 music boxes using 4,800 direct labor hours.Actual fixed overhead for the year was $23,000.What is the company's fixed overhead spending variance?
A)$560 favorable
B)$560 unfavorable
C)$1,480 favorable
D)$1,480 unfavorable

Question

Quizplus · Accepted Answer

Fixed Overhead Spending Variance = Actual Fixed Overhead - (Budgeted Fixed Overhead rate x Actual Direct Labor Hours)
Fixed Overhead Spending Variance = $23,000 - ($5.10 x 4,800) = $560 unfavorable.

R&N Manufacturing Produces Music Boxes