Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($253,000 - 115,000 units) Standard Quantity 1.6 lbs. 1.6 hrs. 1.6 hrs. $ $ $ Standard Price (Rate) 1.70 per Ib. 12 per hr. 1.1 per hr. Standard Unit Cost $ 2.72 19.20 1.76 2.20 Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 120,000 208,200 $ 333,120 165,000 $2,343,000 $ 230,000 $ 285,000 Required: 1. Calculate the fixed overhead spending variance for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable,"U" for unfavorable.) Fixed Overhead Spending Variance

Answer 1

Fixed Overhead Spending Variance = Actual Fixed Oh Cost -Budgeted Fixed OH

Fixed Overhead Spending Variance = 285,000- 253,000 = 32,000 Unfavorable

Answer : 32,000 U