If actual fixed overhead was £164,000 and there was a £4,800 favourable spending variance and a £1,000 unfavourable volume variance, budgeted fixed overhead must have been
A)£168,800.
B)£167,800.
C)£165,000.
D)£163,000.
E)£159,200.

Question

Quizplus · Accepted Answer

The formula for calculating budgeted fixed overhead is:

Budgeted fixed overhead = Actual fixed overhead + Volume variance - Spending variance

Substituting the given values:

Budgeted fixed overhead = £164,000 - £1,000 + £4,800 = £168,800

Therefore, the answer is A) £168,800.

If Actual Fixed Overhead Was £164,000 and There Was a £4,800