Question

Crawford Company's standard fixed overhead rate is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. Last year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Crawford's fixed overhead spending variance for last year

Answer 1

Expenditure variance = $30,000 unfavorable

Step-by-step explanation:

The fixed overhead spending variance is the amount by which the budgeted expenditure differs from the actual fixed overhead. Where the actual expenditure is less than the budgeted, the variance is favorable. An unfavorable variance implies the opposite.

$

Budgeted fixed overhead expenditure 600,000

Actual fixed overhead expenditure 630,000

Spending variance 30,000 Unfavorable