Fixed manufacturing overhead was budgeted at $200,000,and 25,000 direct labour hours were budgeted.If the fixed overhead volume variance was $8,000 favourable and the fixed overhead spending variance was $6,000 unfavourable,what would be the fixed manufacturing overhead applied?
A)$194,000
B)$202,000
C)$206,000
D)$208,000

Question

Quizplus · Accepted Answer

The fixed overhead volume variance is calculated as the difference between the budgeted fixed overhead and the applied fixed overhead. Since the volume variance is $8,000 favourable, the applied overhead must be $8,000 more than the budgeted overhead of $200,000, which is $208,000.

Fixed Manufacturing Overhead Was Budgeted at $200,000,and 25,000 Direct Labour