If actual fixed manufacturing overhead was $55,000 and there was a $1,400 unfavorable spending variance and a $1,000 unfavorable volume variance, budgeted fixed manufacturing overhead must have been
A)$57,400.
B)$53,600.
C)$54,000.
D)$51,700.

Question

Quizplus · Accepted Answer

The budgeted fixed manufacturing overhead is found by adjusting the actual fixed manufacturing overhead for the variances. Since there was a $1,400 unfavorable spending variance, it means the actual spending was $1,400 more than budgeted. Therefore, subtracting this variance from the actual fixed manufacturing overhead ($55,000 - $1,400) gives the budgeted amount before considering the volume variance, which does not affect the calculation of the budgeted fixed manufacturing overhead. Thus, the budgeted fixed manufacturing overhead was $53,600.

If Actual Fixed Manufacturing Overhead Was $55,000 and There Was