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Question - RTC Supply Co. produces cleaning equipment for professional cleaners. At the start of the year, RTC estimated variable overhead costs to be $13 per unit and total fixed overhead costs at $300,000 based on a volume of 60,000 units. The detail for the overhead estimates follows:
Variable Overhead
Budget @ 60,000 units
Actual Costs
Indirect materials
$480,000
$469,500
Utilities
120,000
93,000
Maintenance
180,000
224,000
Total variable overhead
780,000
786,500
Fixed Overhead
Supervisor salaries
125,000
127,000
Depreciation
150,000
145,000
Other fixed overhead
25,000
26,000
Total fixed overhead
300,000
298,000
Total overhead costs
$1,080,000
$1,084,500
Actual production for the year totaled 59,000 units. How much is the variable overhead flexible budget variance?
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