Actual overhead is $496,000, while budgeted overhead is $598,000. What is the fixed overhead static-budget variance...

Actual overhead is $496,000, while budgeted overhead is $598,000. What is the fixed overhead static-budget variance if 250,000 units are produced and 350,000 are budgeted?
1. $80,000 favourable
2. $100,000 unfavourable
3. $100,000 favourable
4. $101,000 unfavourable
5. $102,000 favourable

Expert Solution

e. $ 102,000 favourable

Explanation -

Actual overhead = $ 496,000

Budgeted overhead = $ 598,000

Fixed overhead static budget variance =

Budgeted overhead - actual overhead

$ 598,000 - $ 496,000 = $ 102,000 favourable

As actual overhead are less than budgeted overhead, so favourable variance.

ekkarill92 answered 2 years ago

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