Dellarocco Incorporated makes a single product-a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The fixed overhead budget variance is:
A) $37,328 U
B) $37,328 F
C) $17,000 F
D) $17,000 U

Question

Dellarocco Incorporated makes a single product-a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:  The fixed overhead budget variance is:
A) $37,328 U 
B) $37,328 F 
C) $17,000 F 
D) $17,000 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead
= $372,740 − $355,740 = $17,000 U

Dellarocco Incorporated Makes a Single Product-A Cooling Coil Used in Commercial