Actual fixed overhead for Kapok Company during March was $92,780.The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units.If the company actually produced 4,200 units what is the fixed overhead volume variance for March?
A) $3,780 favorable
B) $18,020 unfavorable
C) $14,240 unfavorable
D) $3,780 unfavorable
E) $14,240 favorable

Question

Quizplus · Accepted Answer

Unit variance = 5,000 - 4,200 = 800 units
Fixed overhead volume variance = 800($89,000/5,000)
800 x $17.80 = $14,240 unfavorable

Actual Fixed Overhead for Kapok Company During March Was $92,780