Fletcher Company collected the following data regarding production of one of its products.

-Compute the fixed overhead cost variance.
A)$18,300 favorable.
B)$18,000 favorable.
C)$18,000 unfavorable.
D)$18,300 unfavorable.
E)$14,300 unfavorable.

Question

Fletcher Company collected the following data regarding production of one of its products.

-Compute the fixed overhead cost variance. 
A)$18,300 favorable. 
B)$18,000 favorable. 
C)$18,000 unfavorable. 
D)$18,300 unfavorable. 
E)$14,300 unfavorable.

Quizplus · Accepted Answer

The fixed overhead cost variance is calculated as follows: 
Fixed Overhead Cost Variance = Actual Fixed Overhead Costs - Budgeted Fixed Overhead Costs

Actual Fixed Overhead Costs = $88,900 
Budgeted Fixed Overhead Costs = ($4.00 x 20,000) + $90,000 = $170,000

Fixed Overhead Cost Variance = $88,900 - $170,000 
Fixed Overhead Cost Variance = $81,100 unfavorable

Therefore, the best choice is C, with an $18,000 unfavorable fixed overhead cost variance.

Fletcher Company Collected the Following Data Regarding Production of One