Accounting · Management Accounting
A company uses a standard absorption costing system. Fixed overheads are absorbed based on 4,000 labour hours, with a budgeted fixed overhead of $120,000. Actual labour hours worked were 3,600 and actual fixed overheads were $118,000. What is the fixed overhead capacity variance?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$12,000 Favourable
- 2$12,000 Adverse✓
- 3$8,000 Favourable
- 4$8,000 Adverse
Correct answer
$12,000 Adverse
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