Question

Culver, Inc. manufacturers motors used in electric toothbrushes and other small appliances. Culver's fixed overhead rate is $7.60 and the company budgeted 165,000 direct labor hours for the year. During the year Culver produced 320,000 motors and used 164,000 direct labor hours.Culver's fixed overhead spending variance was $3,500 unfavorable for the year. What was Culver's actual fixed overhead for the year?

A. $1,250,000

B. $1,257,000

C. $1,246,000

D. $1,249,000

(Answer C is incorrect, also show all steps involved in the calculation).

Answer 1

	Budgeted fixed overhead
		165000*7.6
		1254000
	Spending variance =
	Actual amount of FOH -budgeted fixed overhead
	Actual FOH - 1,254,000 =			3,500
	Actual FOH =		1,254,000-3,500
			1,250,500
	answer)	option A
		1,250,500