Crawford Company’s standard fixed overhead cost is $6 per direct labour hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labour hour per unit. During 2006, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labour.
-Refer to the figure. What is the fixed overhead spending variance for Griffen?
A)$2,000 (U)
B)$4,000 (U)
C)$8,000 (U)
D)$20,000 (U)

Question

Quizplus · Accepted Answer

The fixed overhead spending variance is calculated as the difference between the actual fixed overhead costs and the budgeted fixed overhead costs. In this case, the actual fixed overhead costs are $630,000 and the budgeted fixed overhead costs are $600,000. Therefore, the fixed overhead spending variance is $630,000 - $600,000 = $30,000 (U).

Crawford Company’s Standard Fixed Overhead Cost Is $6 Per Direct