The following information relates to Leonard Manufacturing's overhead costs for the month
Static budget variable overhead $14,200
Static budget fixed overhead $5,600
Static budget direct labor hours 1,000 hours
Static budget number of units 5,000 units
Leonard allocates manufacturing overhead to production based on standard direct labor hours.
Leonard reported the following actual results for last month: actual variable overhead, $14,500; actual fixed overhead, $5,400; actual production of 4,700 units at 0.22 direct labor hours per unit. The standard direct labor time is 0.20 direct labor hours per unit.
Compute the fixed overhead cost variance.
What will be an ideal response
FOH cost variance = Actual FOH - Budgeted FOH
= $5,400 - $5,600
= $200 F
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