Cabot Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance.
A) $18,300 favorable.
B) $18,000 favorable.
C) $18,000 unfavorable.
D) $18,300 unfavorable.
E) $14,300 unfavorable.

Question

Quizplus · Accepted Answer

The fixed overhead cost variance is calculated by comparing the actual fixed overhead costs to the budgeted (or standard) fixed overhead costs. If the actual costs are higher than the budgeted costs, the variance is unfavorable. Without specific data on actual and budgeted fixed overhead costs, the correct answer cannot be determined through calculation here. However, based on the options provided and assuming the question implies that the variance is unfavorable, option C is the correct choice.

Cabot Company Collected the Following Data Regarding Production of One