The following information pertains to the Braun Company for March: Using the four-variance method of factory overhead variance analysis, what is the budget variance?

Question

The following information pertains to the Braun Company for March:  Using the four-variance method of factory overhead variance analysis, what is the budget variance?

Quizplus · Accepted Answer

Budget variance = actual fixed cost - budgeted fixed cost
Budget variance = $31,800 - $30,000*
Budget variance = $1,800 Unfavorable (because actual fixed costs exceeded budgeted fixed costs)
* Budgeted production x standard hours allowed per unit x fixed factory overhead rate
(20,000 x .5 x $3 = $30,000)

The Following Information Pertains to the Braun Company for March