Actual Fixed Overhead for Kapok Company During March Was $92,780

question 76

Multiple Choice

Actual fixed overhead for Kapok Company during March was $92,780.The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units.If the company actually produced 4,200 units what is the fixed overhead volume variance for March?

• A) $3,780 favorable
• B) $18,020 unfavorable
• C) $14,240 unfavorable
• D) $3,780 unfavorable
• E) $14,240 favorable

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Definitions:

Long-Term Asset

An asset that is expected to provide economic benefits to a business for more than one fiscal year, such as property, plant, and equipment.

Revenue Expenditure

A type of expenditure that does not result in the acquisition of long-term assets and is rather incurred in the day-to-day operations of a business.

New Equipment

Recently acquired or installed machinery or tools intended for operational or productive use in an organization.

Ordinary Maintenance

Routine maintenance and repairs necessary to keep an asset in working condition, not significantly prolonging its life or increasing its value.