What is the fixed overhead spending (budget)variance? $$\begin{array} { l | r | }
\hline \text { Actual machine hours } & 840 \
\hline \text { Standard machine hours allowed } & 900 \
\hline \text { Denominator activity (machine hours) } & 1,000 \
\hline \text { Actual fixed overhead costs } & \$ 3,800 \
\hline \text { Budgeted fixed overhead costs } & \$ 4,000 \
\hline \text { Predetermined overhead rate ( } \$ 1 \text { variable } + \$ 4 & \$ 5 \
\text { fixed) } & \
\hline
\end{array}$$
A) $200.
B) $400.
C) $300.
D) $240.

Question

What is the fixed overhead spending (budget)variance? $$\begin{array} { l | r | } 
\hline \text { Actual machine hours } & 840 \
\hline \text { Standard machine hours allowed } & 900 \
\hline \text { Denominator activity (machine hours) } & 1,000 \
\hline \text { Actual fixed overhead costs } & \$ 3,800 \
\hline \text { Budgeted fixed overhead costs } & \$ 4,000 \
\hline \text { Predetermined overhead rate ( } \$ 1 \text { variable } + \$ 4 & \$ 5 \
\text { fixed) } & \
\hline
\end{array}$$
A) $200.
B) $400.
C) $300.
D) $240.

Quizplus · Accepted Answer

The fixed overhead spending (budget) variance is the difference between the budgeted fixed overhead costs and the actual fixed overhead costs. In this case, the budgeted fixed overhead costs are $4,000 and the actual fixed overhead costs are $3,800. Therefore, the fixed overhead spending (budget) variance is $4,000 - $3,800 = $200.

What Is the Fixed Overhead Spending (Budget)variance A) $200 B) $400

What Is the Fixed Overhead Spending (Budget)variance A) $200
B) $400