If the budgeted fixed overhead is $200,000 and the actual fixed overhead is $210

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Question: If the budgeted fixed overhead is $200,000 and the actual fixed overhead is $210,000, what is the fixed overhead variance?

Options:

Correct Answer: $10,000 Unfavorable

Solution:

Fixed overhead variance = Actual Fixed Overhead - Budgeted Fixed Overhead = $210,000 - $200,000 = $10,000 Unfavorable.

If the budgeted fixed overhead is $200,000 and the actual fixed overhead is $210,000, what is the fixed overhead variance?

If the budgeted fixed overhead is $200,000 and the actual fixed overhead is $210,000, what is the fixed overhead variance?

Step 1: Identify the budgeted fixed overhead amount, which is $200,000.
Step 2: Identify the actual fixed overhead amount, which is $210,000.
Step 3: Calculate the fixed overhead variance by subtracting the budgeted fixed overhead from the actual fixed overhead.
Step 4: Perform the calculation: $210,000 (actual) - $200,000 (budgeted) = $10,000.
Step 5: Determine if the variance is favorable or unfavorable. Since the actual is greater than the budgeted, it is unfavorable.

Fixed Overhead Variance – The difference between actual fixed overhead costs incurred and budgeted fixed overhead costs, indicating whether the company spent more or less than planned.