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H&X Co. uses a standard job cost system with a normal capacity of 25,400 direct labour...

H&X Co. uses a standard job cost system with a normal capacity of 25,400 direct labour hours. H&X Co. produces 12,200 units, which cost $186,400 for direct labour (23,300 hours), $27,816 for variable overhead, and $125,050 for fixed overhead. The standard variable overhead per unit is $2.00 (2 hours at $1 per hour), and the standard fixed overhead per unit is $10.20 (2 hours at $5.10 per hour).

Calculate the fixed overhead spending (budget) variance.

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Answer #1
Fixed OH Spending Variance:
Actual Fixed OH Expense                                 1,25,050
Less: Budgeted Fixed OH Expense(25400*5.10)                                 1,29,540 (Total Standard Hours Capcity*Rate PH)
Fixed OH Spending Variance                                      4,490
(favourbale)
The Spending is Lower than Budget
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