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Wave Fashions uses standard costs for its manufacturing division. The allocation base for overhead costs is...

Wave Fashions uses standard costs for its manufacturing division. The allocation base for overhead costs is direct labor hours. From the following​ data, calculate the total fixed overhead variance.

Actual fixed overhead

$ 32,000

Budgeted fixed overhead

$ 26,000

Allocated fixed overhead

$ 28,350

Standard overhead allocation rate

$ 6.75

Standard direct labor hours per unit

2.1 DLHr

Actual output

2,000 units

A.

$ 3,650 F

B.

$ 3,650 U

C.

$ 13,500 F

D.

$ 13,500 U

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Answer #1
B.

$ 3,650 U
Fixed Overhead Total Variance is the difference between actual and absorbed fixed production overheads during a period.
Fixed overhead variance = Actual fixed overhead - Absorbed fixed overhead
Fixed overhead variance = 32,000 - 28,350
Fixed overhead variance = 3,650 U
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