Accounting · Variance Analysis
A manufacturing company operates a standard absorption costing system. Last month 25,000 production hours were budgeted and the budgeted fixed production overhead cost was $125,000. Last month the actual hours worked were 26,000 and the standard hours for actual production were 24,000. What was the fixed production overhead capacity variance for last month?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$10,000 Favourable
- 2$10,000 Adverse
- 3$5,000 Favourable✓
- 4$5,000 Adverse
Correct answer
$5,000 Favourable
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