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The following information is available for Baxter Manufacturing for April: Actual machine hours 980 Standard machine...

The following information is available for Baxter Manufacturing for April:

Actual machine hours 980

Standard machine hours allowed 1,040

Denominator activity (machine hours) 1,700

Actual fixed overhead costs $ 6,600

Budgeted fixed overhead costs $ 6,800

Predetermined overhead rate ($1 variable + $4 fixed) $ 5

Is the fixed overhead price (spending) variance for April favorable or unfavorable? show work

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Answer #1
Particulars Rate per unit × units Total
Flexible budget fixed overhead cost applicable for actual production $              4.00       1,040.00 $          4,160.00
Less: Actual fixed overhead costs $          6,600.00
FOH budget (spending) variance $       (2,440.00)

Answer is:

Unfavorable

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