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Tex Metal Company has developed standard overhead costs based on a monthly capacity of 180,000...

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Accounting

Tex Metal Company has developed standard overhead costs based on a monthly capacity of 180,000 machine hours as follows:

Standard costs per unit:
Variable portion 2 hours @ $3 = $6
Fixed portion 2 hours @ $5 = 10
$16

During November, 90,000 units were scheduled for production, but only 80,000 units were actually produced. The following data relate to November: Actual machine hours used were 165,000. Actual overhead incurred totaled $1,378,000 ($518,000 variable plus $860,000 fixed).

All inventories are carried at standard cost.

Refer to Tex Metal Company. The fixed overhead spending variance for November was

Select one:

a. $60,000 U.

b. $60,000 F.

c. $40,000 U.

d. $40,000 F.

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