The Dogwood Technology Company managerial accountant computes the May total variance report. The budgeted fixed overhead was $46,140 and the standard fixed overhead cost allocated to production was $45,910. The actual fixed overhead totaled $45,490. Compute the fixed overhead budget variance and the fixed overhead volume variance.
A)$880 U; $420 F
B)$650 F; $230 U
C)$420 U; $880 F
D)$230 F; $650 U

Question

Quizplus · Accepted Answer

Fixed overhead budget variance = Actual fixed overhead - Budgeted fixed overhead = $45,490 - $46,140 = -$650 (Favorable, since actual costs are less than budgeted costs). Fixed overhead volume variance = Standard fixed overhead cost allocated to production - Budgeted fixed overhead = $45,910 - $46,140 = -$230 (Unfavorable, since the standard cost allocated is less than the budgeted cost).

The Dogwood Technology Company Managerial Accountant Computes the May Total