Avon Co.has a favorable fixed overhead spending variance of $2,800.During February,Avon budgeted to produce 2,500 units,it actually produced 2,400 units,and it budgeted $75,000 for fixed overhead.How much was actually spent on fixed overhead?
A)$72,000
B)$72,200
C)$75,000
D)$77,800

Question

Quizplus · Accepted Answer

The favorable fixed overhead spending variance means that the actual fixed overhead spent is less than the budgeted fixed overhead. We can use the formula to calculate the fixed overhead spending variance:

Fixed Overhead Spending Variance = Budgeted Fixed Overhead - Actual Fixed Overhead

$2,800 = $75,000 - Actual Fixed Overhead
Actual Fixed Overhead = $72,200

Therefore, the actual amount spent on fixed overhead was $72,200, which is answer choice B.

Avon CoHas a Favorable Fixed Overhead Spending Variance of $2,800