Miracle Industries produces high-end flutes for professional musicians across the globe. Actual fixed manufacturing overhead for the year was $1,200,000, while the budgeted fixed manufacturing overhead was $1,220,000. Using a standard costing system, the company allocated $1,190,000 of overhead to production.
Requirements
1. Calculate the total fixed overhead variance. What does this tell managers?
2. Determine the fixed overhead budget variance. What does this tell managers?
3. Determine the fixed overhead production volume variance. What does this tell managers?