Griffen Corporation uses a standard costing system.Information for the month of May is as follows: The factory overhead rate is based on a normal volume of 12,000 direct labor hours.Standard cost data at 12,000 direct labor hours were as follows:

-What is the fixed overhead spending variance for Griffen?
A) $2,000 (
B) $8,000 (
C) $4,000 (
D) $20,000 (

Question

Griffen Corporation uses a standard costing system.Information for the month of May is as follows:  The factory overhead rate is based on a normal volume of 12,000 direct labor hours.Standard cost data at 12,000 direct labor hours were as follows:
 
-What is the fixed overhead spending variance for Griffen?
A) $2,000 (
B) $8,000 (
C) $4,000 (
D) $20,000 (

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as the difference between the actual fixed overhead costs and the budgeted fixed overhead costs. In this case, the actual fixed overhead costs are $22,000 and the budgeted fixed overhead costs are $20,000. Therefore, the fixed overhead spending variance is $2,000 (U).

Griffen Corporation Uses a Standard Costing System