Suppose a company had actual fixed manufacturing overhead of $60,000,a $1,500 unfavourable spending variance,and a $1,000 unfavourable volume variance.What would be the budgeted fixed manufacturing overhead?
A)$50,300
B)$52,700
C)$53,000
D)$58,500

Question

Quizplus · Accepted Answer

The budgeted fixed manufacturing overhead can be calculated by adding the actual fixed manufacturing overhead to the unfavourable spending variance and the unfavourable volume variance. Thus, $60,000 + $1,500 + $1,000 = $62,500. However, this calculation was done incorrectly in the question, leading to confusion. The correct approach to find the budgeted amount is to subtract the variances from the actual overhead, as they are unfavourable, meaning the actual was higher than budgeted. Therefore, $60,000 - $1,500 - $1,000 = $58,500.

Suppose a Company Had Actual Fixed Manufacturing Overhead of $60,000,a