Zenith Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead cost variance. $$\begin{array} { | l | l | }
\hline \text { Actual fixed overhead } & \$ 32,000 \
\hline \text { Budgeted fixed overhead } & \$ 24,000 \
\hline \text { Standard overhead allocation rate } & \$ 8 \
\hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \
\hline \text { Actual output } & 2,500 \text { units } \
\hline
\end{array}$$

Question

Zenith Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead cost variance. $$\begin{array} { | l | l | } 
\hline \text { Actual fixed overhead } & \$ 32,000 \
\hline \text { Budgeted fixed overhead } & \$ 24,000 \
\hline \text { Standard overhead allocation rate } & \$ 8 \
\hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \
\hline \text { Actual output } & 2,500 \text { units } \
\hline
\end{array}$$

Quizplus · Accepted Answer

The fixed overhead cost variance is calculated as the difference between actual fixed overhead and budgeted fixed overhead. Here, it is $32,000 (actual) - $24,000 (budgeted) = $8,000 unfavorable (U).

Zenith Fashions Uses Standard Costs for Their Manufacturing Division A)$36,000 F B)$36,000 U C)$8,000 F D)$8,000 U

Zenith Fashions Uses Standard Costs for Their Manufacturing Division A)$36,000 F
B)$36,000 U
C)$8,000 F
D)$8,000 U