Tucker Co.has budgeted fixed overhead of $225,000 based on budgeted production of 7,500 units.During February,7,200 units were produced and $233,400 was spent on fixed overhead.What is the fixed overhead spending variance?
A)$8,400 unfavorable
B)$9,000 unfavorable
C)$17,400 unfavorable
D)$600 favorable

Question

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as the actual fixed overhead costs minus the budgeted fixed overhead costs. In this case, it's $233,400 (actual) - $225,000 (budgeted) = $8,400 unfavorable. Fixed overhead costs are not supposed to vary with the level of production, so the difference between the actual and budgeted amounts represents the variance.

Tucker CoHas Budgeted Fixed Overhead of $225,000 Based on Budgeted Production