Question

Paste EE EE B A Format Painter Merge & Center Conditional Format as Formatting Table S Clipboard Font Alignment Number Styles B6 A C D E F G J Fixed Overhead Spending Variance. Sampson Company applies fixed manufacturing overhead costs to products based on direct labor hours. Budgeted direct labor hours for the month of January totaled 30,000 hours, with a standard cost per direct labor hour of $12. Actual fixed overhead costs totaled $350,000 for January. 2 3 Required: 4 Calculate the fixed overhead spending variance for January, and clearly label whether the variance is favorable or unfavorable. Fixed Overhead FOH 6 Budget cost Actual OH Budgeted OH Spending Variance 7 Budget DLH Per hour 8 9 Actual Cost 10 11 12 13 14

Answer 1

Budgeted Labor Hours = 30,000 Hours

Standard Cost Per Labor Hour = $12

Budgeted Fixed Overhead Cost = 30,000 hours @ $12 i.e. $360,000

Actual Overhead Cost = $350,000

Fixed Overhead Spending Variance = Actual Overhead - Budgeted Overhead

= $350,000 - $360,000

= -$10,000

i.e. $10,000 Favorable Fixed Overhead Spending Variance