Refer to Cannon Company. What is the fixed overhead spending variance for the current year?
A) $24,000 F
B) $30,000 U
C) $50,000 U
D) $60,000 F

Question

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as actual fixed overhead costs incurred minus budgeted fixed overhead costs. From the data given in the question, we can calculate that the actual fixed overhead costs incurred are $300,000 and the budgeted fixed overhead costs are $250,000. Therefore, the fixed overhead spending variance is $50,000 unfavorable (U), which means that the actual fixed overhead costs were higher than the budgeted fixed overhead costs. So, option C is the correct choice.