Gregorich Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The fixed overhead budget variance is:
A) $20,000 U
B) $20,000 F
C) $62,070 F
D) $62,070 U

Question

Gregorich Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:  The fixed overhead budget variance is:
A) $20,000 U 
B) $20,000 F 
C) $62,070 F 
D) $62,070 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead
= $314,490 − $294,490 = $20,000 U

Gregorich Incorporated Makes a Single Product-A Critical Part Used in Commercial