Bonehead Co. has the following factory overhead costs for the most recent period:$\begin{array}{lr}
\text { Standard overhead cost applied to this period's production } & \$ 72,000 \
\text { Flexible budget for overhead based on output (i.e., units produced) } & 65,000 \
\text { Total budgeted overhead in the master (static) budget } & 86,000 \
\text { Actual total overhead cost incurred during the period } & 76,000
\end{array}$The fixed overhead production volume variance for Bonehead Co. this period, to the nearest whole dollar, is:
A) $4,000 unfavorable.
B) $7,000 favorable.
C) $10,000 favorable.
D) $11,000 unfavorable.
E) $14,000 unfavorable.

Question

Quizplus · Accepted Answer

Fixed overhead production volume variance = Standard overhead cost applied to this period's production - Flexible budget for overhead based on output (i.e., units produced)= $72,000 - $65,000= $7,000 favorable

Bonehead Co The Fixed Overhead Production Volume Variance for Bonehead Co