Question

A manufacturing company has a standard costing system based on standard direct labor-hours (dlhs) as the measure of activity. data from the company's flexible budget for manufacturing overhead are given below: denominator level of activity 6,400 dlhs overhead costs at the budgeted activity level: variable overhead cost $ 35,200 fixed overhead cost $ 70,400 the following data pertain to operations for the most recent period: actual hours 6,600 dlhs standard hours allowed for the actual output 6,272 dlhs actual total variable manufacturing overhead cost $ 38,400 actual total fixed manufacturing overhead cost $ 69,500 the fixed manufacturing overhead budget variance for the period is closest to: a manufacturing company has a standard costing system based on standard direct labor-hours (dlhs) as the measure of activity. data from the company's flexible budget for manufacturing overhead are given below: denominator level of activity 6,400 dlhs overhead costs at the budgeted activity level: variable overhead cost $ 35,200 fixed overhead cost $ 70,400 the following data pertain to operations for the most recent period: actual hours 6,600 dlhs standard hours allowed for the actual output 6,272 dlhs actual total variable manufacturing overhead cost $ 38,400 actual total fixed manufacturing overhead cost $ 69,500 the fixed manufacturing overhead budget variance for the period is closest to:

a) $930 u
b) $1,150 f
c) $900 u
d) $900 f

Answer 1

The fixed manufacturing overhead budget variance for the period is $900 Favorable (F), calculated by subtracting the actual fixed overhead cost from the budgeted cost. The correct option is D.

Step-by-step explanation:

The fixed manufacturing overhead budget variance is calculated by comparing the budgeted fixed overhead cost to the actual fixed overhead cost.

In this scenario, the budgeted fixed overhead cost is $70,400, while the actual fixed overhead cost incurred is $69,500. To find the variance, we subtract the actual cost from the budgeted cost: $70,400 - $69,500, which equals $900.

Since the actual cost is lower than the budgeted amount, the variance is favorable, denoted as 'F'. Therefore, the fixed manufacturing overhead budget variance for the period is $900 F.