Question

The following information was compiled by Frank Ironman Incorporated:

Answer 1

Answer:

The correct option is D,$20,000 unfavorable

Explanation:

In the first place, it is noteworthy that fixed overhead flexible budget variance is the between the budgeted overhead cost and the actual fixed overhead incurred.

When actual fixed cost overhead is lower than budgeted,the resultant effect is a favorable variance,where the reverse is the case when the budgeted fixed overhead cost is higher as is the case here.

budgeted fixed overhead costs              $200,000

Actual fixed overhead costs                      ($220,000)

fixed overhead flexible budget variance  ($20,000) unfavorable