RECOMMENDED!!You have started working as a cost accountant for
You have started working as a cost accountant for a firm that has only been in business for one month. The firm is able to buy a new type of biodegradable plastic at a fixed price of $100 per roll. The plastic is then cut and sealed to make garbage bags. Fixed factory overhead is estimated to be $125,000 per month. During this past month, 8,000 cartons of garbage bags were produced, which represents 80% of the activity volume. You are given the following information:Rolls of plastic used40Variable overhead incurred$61,000Overhead efficiency variance$5,000UStandard costs per carton of garbage bags:Labour hours2Wage rate$8per hourTotal overhead$20Rolls of plastic0.004rollsCalculate the following:Fixed overhead budget variance $___________ (favourable, unfavourable or neither)
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