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Der Company uses a standard cost system in which it applies manufacturing overhead on the basis of direct labor-hours. Two direct labor-hours are required for each unit produced. The budgeted activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. Compute the fixed overhead spending variance for the period

Der Company uses a standard cost system in which it applies manufacturing overhead on the basis of direct labor-hours. Two direct labor-hours are required for each unit produced. The budgeted activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. Compute the fixed overhead spending variance for the period

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...
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Der Company uses a standard cost system in which it applies manufacturing overhead on the basis of direct labor-hours. Two direct labor-hours are required for each unit produced. The budgeted activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. Compute the fixed overhead spending variance for the period.
Transcribed Image Text:Der Company uses a standard cost system in which it applies manufacturing overhead on the basis of direct labor-hours. Two direct labor-hours are required for each unit produced. The budgeted activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. Compute the fixed overhead spending variance for the period.
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