Answer:
Fixed overhead variance= $18,000 favorable
Explanation:
Giving the following information:
Actual units produced: 12,000
Actual fixed overhead incurred: $750,000
Standard fixed overhead rate: $16 per hour
Budgeted fixed overhead: $740,000
Planned level of machine-hour activity: 45,000
Auditory estimates four hours to manufacture a completed unit.
First, we need to calculate the standard fixed costs for the period:
Allocated overhead= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated overhead= 16* (12,000*4)= $768,000
Actual overhead= 750,000
Fixed overhead variance= actual - allocated
Fixed overhead variance= 750,000 - 768,000= $18,000 favorable
