Answer:
a. Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead
= $8,000,000 - $8,750,000
= $750,000 Unfavorable
b. Predetermined overhead rate per barrel = $8,000,000 / 5,000,000
= $1.60 per barrel
Fixed overhead applied = 5,100,000 * $1.60
= $8,160,000
Fixed overhead volume variance = Fixed overhead applied - Budgeted fixed overhead
= $8,160,000 - $8,000,000
= $160,000 Favorable
c. Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead
Predetermined overhead rate per barrel = Budgeted fixed overhead / Planned outputs
Fixed overhead volume variance = Fixed overhead applied - Budgeted fixed overhead
