Point Company uses the standard costing method. The company\'s main product is a

Question

Point Company uses the standard costing method. The company's main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year were $6,750. During the year, the company produced and sold 8,000 units. Actual fixed overhead costs were $4,800. Compute the fixed overhead budget variance. a. $1,950 (U) b. $300 (U) c. $1,950 (F)
d. $300 (F) Point Company uses the standard costing method. The company's main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year were $6,750. During the year, the company produced and sold 8,000 units. Actual fixed overhead costs were $4,800. Compute the fixed overhead budget variance. a. $1,950 (U) b. $300 (U) c. $1,950 (F)
d. $300 (F)

Explanation / Answer

the fixed overhead budget variance =$6,750-$4,800 = $1,950.00 c. $1,950 (F)

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