Fletcher has budgeted fixed overhead of $135,000 based on budgeted production of 9,000 units.During July,9,400 units were produced and $142,800 was spent on fixed overhead.What is the fixed overhead spending variance?
A)$7,800 unfavorable
B)$1,800 unfavorable
C)$1,800 favorable
D)$6,000 favorable

Question

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as the actual fixed overhead costs minus the budgeted fixed overhead costs. In this case, it's $142,800 (actual) - $135,000 (budgeted) = $7,800 unfavorable. Fixed overhead costs are not supposed to vary with the level of production, so any difference between the actual and budgeted amounts is considered a variance.

Fletcher Has Budgeted Fixed Overhead of $135,000 Based on Budgeted