Which relationship represents fixed overhead budgeted at the beginning of the year?
A) BFOH = SFOR × AH
B) BFOH = SFOR / SH for actual production
C) BFOH = SFOR × SH for actual production
D) BFOH = SFOR × SH for planned production

Question

Quizplus · Accepted Answer

BFOH (Budgeted Fixed Overhead) represents the fixed overhead costs that are determined and budgeted at the beginning of the year. Option D represents BFOH calculated by multiplying SFOR (Standard Fixed Overhead Rate) by SH (Standard Hours) for planned production, which is a common method of determining fixed overhead costs at the beginning of the year. Option A represents BFOH calculated based on actual usage, while options B and C are based on actual production rather than the planned production at the beginning of the year.

Which Relationship Represents Fixed Overhead Budgeted at the Beginning of the Year