Tierman 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 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) $14,000 F
B) $43,560 U
C) $43,560 F
D) $14,000 U

Question

Tierman 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 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) $14,000 F 
B) $43,560 U 
C) $43,560 F 
D) $14,000 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead
= $207,700 − $221,700 = $14,000 F

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