Use the following information to answer the following Questions
Sigmo Company, which uses a standard cost system, budgeted $800,000 of fixed overhead when 50,000 machine hours were anticipated. Other data for the period were:
Actual units produced: 10,600
Actual machine hours worked: 51,800
Actual variable overhead incurred: $475,000
Actual fixed overhead incurred: $790,100
Standard variable overhead rate per machine hour: $8.50
Standard production time per unit: 5 hours

-Sigmo's fixed-overhead budget variance is:
A) $9,900U.
B) $9,900F.
C) $28,800U.
D) $28,800F.
E) None of the answers is correct.

Question

Use the following information to answer the following Questions
Sigmo Company, which uses a standard cost system, budgeted $800,000 of fixed overhead when 50,000 machine hours were anticipated. Other data for the period were: 
	Actual units produced: 10,600
	Actual machine hours worked: 51,800
	Actual variable overhead incurred: $475,000
	Actual fixed overhead incurred: $790,100
	Standard variable overhead rate per machine hour: $8.50
	Standard production time per unit: 5 hours

-Sigmo's fixed-overhead budget variance is:
A) $9,900U.
B) $9,900F.
C) $28,800U.
D) $28,800F.
E) None of the answers is correct.

Quizplus · Accepted Answer

The fixed-overhead budget variance is calculated as the difference between the budgeted fixed overhead and the actual fixed overhead incurred. In this case, it is $800,000 (budgeted) - $790,100 (actual) = $9,900 favorable (F), because the actual fixed overhead was less than what was budgeted.

Use the Following Information to Answer the Following Questions