Mathematics · Cost Accounting - Overhead Variances
The following information is available for Wick Co for Month 1: Budgeted fixed overheads: $20,000 to be absorbed at $10/hr (standard time to make 1 unit = 4 hours). Actual fixed overheads: $23,000. Actual production: 550 units taking 2,475 hours. Which of the following correctly states the Fixed Overhead Expenditure, Capacity, and Efficiency Variances?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Expenditure = $3,000 Adverse; Capacity = $4,750 Favourable; Efficiency = $2,750 Adverse✓
- 2Expenditure = $3,000 Adverse; Capacity = $3,750 Favourable; Efficiency = $1,750 Adverse
- 3Expenditure = $2,000 Adverse; Capacity = $4,650 Favourable; Efficiency = $2,750 Adverse
- 4Expenditure = $2,000 Adverse; Capacity = $4,740 Favourable; Efficiency = $2,730 Adverse
Correct answer
Expenditure = $3,000 Adverse; Capacity = $4,750 Favourable; Efficiency = $2,750 Adverse
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