The fixed manufacturing overhead budget variance equals:
A) Actual fixed manufacturing overhead cost − Applied fixed manufacturing overhead cost.
B) Actual fixed manufacturing overhead cost − Budgeted fixed manufacturing overhead cost.
C) Budgeted fixed manufacturing overhead cost − Applied fixed manufacturing overhead cost.
D) Actual fixed manufacturing overhead cost − (Actual hours × Standard fixed manufacturing overhead rate).

Question

Quizplus · Accepted Answer

The fixed manufacturing overhead budget variance measures the difference between the actual fixed manufacturing overhead cost incurred and the budgeted or planned fixed manufacturing overhead cost. Therefore, the correct formula for calculating this variance is actual fixed manufacturing overhead cost minus budgeted fixed manufacturing overhead cost.

The Fixed Manufacturing Overhead Budget Variance Equals