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Assume that $102,000 is budgeted for fixed overhead. $95,000 was actually spent on fixed overhead. Fixed overhead is applied to production at $10 per labor
Assume that $102,000 is budgeted for fixed overhead. $95,000 was actually spent on fixed overhead. Fixed overhead is applied to production at $10 per labor hour, and the achieved output was 5,000 units. The standard labor hours are 2 hours per unit.
The total fixed overhead variance is $2,000 favorable.
All of these choices are correct.
The fixed overhead spending variance is $7,000 favorable.
The fixed overhead volume variance is $5,000 unfavorable.
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