Redel Inc. has the following results for the current period Budget Actual Fixed

Question

Redel Inc. has the following results for the current period

Budget

Actual

Fixed Overhead

$ 153941

$ 158618

Units produced

6513

6109

Direct labour hours

13026

321193

Fixed overhead is applied at $12 per direct labour hour. Variable overhead is applied at $27.50 per DLH. The standard hours per unit are 2 direct labour hours. Actual variable overhead was $321193.

Which of the following amounts represents the fixed overhead budget variance? (a negative number implies an unfavourable variance)

Select one:

a. $-7325

b. $4677

c. $-4677

d. $7325

Redel Inc. has the following results for the current period

Budget

Actual

Fixed Overhead

$ 153941

$ 158618

Units produced

6513

6109

Direct labour hours

13026

321193

Fixed overhead is applied at $12 per direct labour hour. Variable overhead is applied at $27.50 per DLH. The standard hours per unit are 2 direct labour hours. Actual variable overhead was $321193.

Which of the following amounts represents the fixed overhead budget variance? (a negative number implies an unfavourable variance)

Explanation / Answer

Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead

Fixed overhead budget variance = $153,941 - $158,618

Fixed overhead budget variance = $-4,677

So, answer is c.$-4,677

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