Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During 2011, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Crawford's fixed overhead spending variance for 2011?
A) $60,000 F
B) $24,000 F
C) $36,000 U
D) $30,000 U

Question

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as the difference between actual fixed overhead costs and budgeted fixed overhead costs. The budgeted fixed overhead costs are $600,000, and the actual fixed overhead costs are $630,000. Therefore, the variance is $630,000 - $600,000 = $30,000 unfavorable (U).

Crawford Company's Standard Fixed Overhead Cost Is $6 Per Direct