The managerial accountant at Space Right Office Cubicles calculates fixed overhead variances to complete the August report. The actual fixed overhead cost in the month of August was $62,100 and the budgeted fixed overhead cost was $63,300. The standard hours in August were 3300 and the standard rate per machine-hour was $19. Calculate the standard fixed overhead cost allocated to production, the fixed overhead budget variance, and the fixed overhead volume variance.
A)$63,300; $1800 F; $600 U
B)$62,100; $3332 F; $1200 U
C)$62,700; $1200 F; $600 U
D)$58,800; $600 F; $1200 U

Question

Quizplus · Accepted Answer

1. Standard fixed overhead cost allocated to production = Standard hours x Standard rate per machine-hour
= 3300 x $19 = $62,700

2. Fixed overhead budget variance = Actual fixed overhead cost - Budgeted fixed overhead cost 
= $62,100 - $63,300 = $1200 F

3. Fixed overhead volume variance = (Standard hours - Actual hours) x Standard rate per machine-hour 
= (3300 - Actual hours) x $19

We don't have the actual hours, so we cannot calculate the exact value of the fixed overhead volume variance. Therefore, option C is the best choice since it correctly calculates the standard fixed overhead cost allocated to production and the fixed overhead budget variance.

The Managerial Accountant at Space Right Office Cubicles Calculates Fixed