Fletcher 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.Actual fixed overhead $338,000 - Applied (40,000 * $8.00 = $320,000)= $18,000 unfavorable.

Question

Fletcher 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.Actual fixed overhead $338,000 - Applied (40,000 * $8.00 = $320,000)= $18,000 unfavorable.

Quizplus · Accepted Answer

The fixed overhead cost variance is calculated as the actual fixed overhead cost minus the applied fixed overhead cost. In this case, the actual fixed overhead cost is $338,000 and the applied fixed overhead cost is $320,000 ($8.00 per unit multiplied by 40,000 units). Therefore, the fixed overhead cost variance is $18,000 unfavorable (actual - applied).

Fletcher Company Collected the Following Data Regarding Production of One