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Variable OH / unit $6
Fixed OH / unit $4production:
Actual 800
budget 900Actual OH Expenditures $8500
Calculate FOH Expenditures Variance
ANS :100A
I dnt know how please ExplainWhy are you attempting questions for which you don’t have an answer?
Kindly use a revision kit from one of ACCA’s approved publishers. They contain lots of exam standard question which will help you practice better for your exam.Fixed Overhead expenditure Variance………………Simply looks at spending(dollars$$$) on fixed overhead. Did we spend more on overhead than planned .Examples of increased spending (increase in rent,management salary,licence)
Using your question Budget Overhead expenditure missing but Actual Overhead Expenditure is 8500.
Fixed overhead expenditure= Budget Fixed Overhead-Actual Fixed Overhead)
The actual variable overheads must be 800 x $6 = $4,800.
Therefore the actual fixed overheads must be 8,500 – 4,800 = $3,700.
The budgeted fixed overheads were 900 x $4 = $3,600. (The absorption rate is based on budgeted overheads and budgeted production).
Therefore the fixed overhead expenditure variance = 3,700 – 3,600 = $100 A
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