Question

Actual units produced: 13,000 Actual fixed overhead incurred: $742,000 Standard fixed overhead rate: $15 per hour Budgeted fixed overhead: $720,000 Planned level of machine-hour activity: 48,000 If Auditory estimates four hours to manufacture a completed unit, the company's fixed-overhead budget variance would be:
1. $60,000 unfavorable.
2. $22,000 unfavorable.
3. $60,000 favorable.
4. None of the answers is correct.
5. $22,000 favorable.

Answer 1

Answer:

 $ 22,000 unfavourable

Explanation:

The fixed expenditure budget variance is the difference between between the actual expenditure and the budgeted expenditure

Fixed overhead expenditure variance =

Budgeted expenditure     =   $720,000

Actual expenditure          =      $742,000

Expenditure variance               $ 22,000 unfavourable