Beech has budgeted fixed overhead of $202,500 based on budgeted production of 13,500 units.During July,14,100 units were produced and $214,200 was spent on fixed overhead.What is the fixed overhead volume variance?
A)$11,700 unfavorable
B)$1,800 unfavorable
C)$1,800 favorable
D)$9,000 favorable

Question

Quizplus · Accepted Answer

The fixed overhead volume variance is calculated as (Budgeted production - Actual production) x Fixed overhead rate per unit. The fixed overhead rate per unit is $202,500 / 13,500 = $15. The variance is (13,500 - 14,100) x $15 = -$9,000, which is favorable because more units were produced than budgeted.

Beech Has Budgeted Fixed Overhead of $202,500 Based on Budgeted