What was the actual fixed overhead cost incurred in the provided data?

What was the actual fixed overhead cost incurred in the provided data?

• A. $20,000
• B. $24,000
• C. $21,000
• D. $22,000

Answer: (C)

The key idea is to identify costs that do not vary with production and sum them to find the actual fixed overhead incurred for the period. Fixed overhead consists of items like depreciation on factory equipment, factory rent, salaries of supervisory staff, and other costs that stay constant regardless of output. To determine the actual amount, you look at the data and add up all the items designated as fixed overhead for that period. In the provided data, those fixed items total twenty-one thousand dollars, so that is the actual fixed overhead incurred. The other numbers don’t represent the sum of the fixed-cost items shown, so they don’t reflect the true fixed overhead incurred.

The key idea is to identify costs that do not vary with production and sum them to find the actual fixed overhead incurred for the period. Fixed overhead consists of items like depreciation on factory equipment, factory rent, salaries of supervisory staff, and other costs that stay constant regardless of output. To determine the actual amount, you look at the data and add up all the items designated as fixed overhead for that period. In the provided data, those fixed items total twenty-one thousand dollars, so that is the actual fixed overhead incurred. The other numbers don’t represent the sum of the fixed-cost items shown, so they don’t reflect the true fixed overhead incurred.