Exercise 623 Scott Sykes publishes a pilot training course c

Exercise 6-23 Scott Sykes publishes a pilot training course curriculum kit that he sells to flight schools across the country. He prepared the following static budget for the year based on expected sales of 28,200 curriculum kits. Sales revenue Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed manufacturing overhead Fixed selling and administrative expenses Operating income $3,525,000 1,410,000 423,000 1,692,000 789,600 347,800 $554,600 At the end of the year, Scott had sold 29,140 curriculum kits at an average rate of $120 per hour. During the year, he incurred fixed overhead totaling $783,960 Calculate the fixed overhead spending variance. (If variance is zero, select \"Not Applicable\" and enter 0 for the amounts.) Fixed overhead spending variance $ Question Attempts: 0 of 3 used

Solution

Answer to Exercise 6-23:

Budgeted Fixed Overhead = $789,600
Actual Fixed Overhead = $783,960

Fixed Overhead Spending Variance = Budgeted Fixed Overhead - Actual Fixed Overhead
Fixed Overhead Spending Variance = $789,600 - $783,960
Fixed Overhead Spending Variance = $5,640 Favorable

Answer to Exercise 6-24:

Budgeted Fixed Overhead per unit = $1.52
Budgeted number of boxed produced = 32,000
Actual Fixed Overhead = $44,800

Budgeted Fixed Overhead = Budgeted Fixed Overhead per unit * Budgeted number of boxed produced
Budgeted Fixed Overhead = $1.52 * 32,000
Budgeted Fixed Overhead = $48,640

Fixed Overhead Spending Variance = Budgeted Fixed Overhead - Actual Fixed Overhead
Fixed Overhead Spending Variance = $48,640 - $44,800
Fixed Overhead Spending Variance = $3,840 Favorable