White Company budgeted for $200,000 of fixed overhead cost and volume of 40,000 units.During the year,the company produced and sold 39,000 units and spent $210,000 on fixed overhead. The fixed overhead cost spending variance is:
A) $10,000 favorable.
B) $10,000 unfavorable.
C) $5,000 favorable.
D) $5,000 unfavorable.

Question

Quizplus · Accepted Answer

The fixed overhead cost spending variance is calculated by subtracting the budgeted fixed overhead cost from the actual fixed overhead cost.

Fixed Overhead Cost Spending Variance = Actual Fixed Overhead Cost - Budgeted Fixed Overhead Cost

= $210,000 - $200,000

= $10,000 unfavorable

Therefore, the correct answer is B, which is $10,000 unfavorable.

White Company Budgeted for $200,000 of Fixed Overhead Cost and Volume