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6 February, 18:30

Hockey Accessories Corporation manufactured 21 comma 600 duffle bags during March. The following fixed overhead data pertain to March: Actual Static Budget Production 21 comma 600 units 22 comma 000 units Machineminushours 1 comma 150 hours 2 comma 200 hours Fixed overhead costs for March $ 84 comma 200 $ 92 comma 400 What is the amount of fixed overhead spending variance?

A. $ 6 comma 520 favorable

B. $ 6 comma 520 unfavorable

C. $ 8 comma 200 unfavorable

D. $ 8 comma 200 favorable

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  1. 6 February, 18:37
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    D) $8,200 favorable

    Explanation:

    Hockey Accessories Corporation manufactured 21,600 duffle bags during March. The following data pertain to March:

    Actual Static Budget

    Production 21,600 units 22,000 units

    Machine hours 1,150 hours 2,200 hours

    Fixed overhead costs $ 84,200 $ 92,400

    What is the amount of fixed overhead spending variance?

    Hockey Accessories Corporation estimated its fixed overhead costs at $92,400, but the actual overhead costs were only $84,200. The difference between estimated and actual costs is $8,200 favorable variance ( = $92,400 - $84,200) since the fixed overhead costs were lower than estimated.
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