Figure 8
The following information was extracted from the accounting records of Noelle Company:
Budgeted fixed overhead for the period is £420,000, and the budgeted fixed overhead rate is based on an expected capacity of 30,000 direct labour hours.
The following information is available regarding the company's operations for the period:

-Refer to Figure 8. Noelle's fixed overhead spending (expenditure) variance would be
A) £10,000 unfavorable
B) £11,000 unfavorable
C) £21,000 favorable
D) £31,000 favorable

Question

Figure 8
The following information was extracted from the accounting records of Noelle Company:
Budgeted fixed overhead for the period is £420,000, and the budgeted fixed overhead rate is based on an expected capacity of 30,000 direct labour hours.
The following information is available regarding the company's operations for the period:
  
-Refer to Figure 8. Noelle's fixed overhead spending (expenditure) variance would be
A) £10,000 unfavorable 
B) £11,000 unfavorable 
C) £21,000 favorable 
D) £31,000 favorable

Quizplus · Accepted Answer

The fixed overhead spending (expenditure) variance is calculated as the difference between the actual fixed overhead costs and the budgeted fixed overhead costs. If the actual costs are higher than budgeted, the variance is unfavorable. Without the specific details from Figure 8, the correct answer cannot be determined from calculations here, but based on the options provided, if the choice is A) £10,000 unfavorable, it implies that the actual fixed overhead costs were £10,000 higher than what was budgeted.

Figure 8 the Following Information Was Extracted from the Accounting Records of Records