Question

Reidenbach Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The budgeted fixed manufacturing overhead cost for the most recent month was $17,100 and the actual fixed manufacturing overhead cost for the month was $17,450. The company based its original budget on 4,500 machine-hours. The standard hours allowed for the actual output of the month totaled 4,810 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month

Answer 1

$350 unfavorable

Step-by-step explanation:

The computation of the overall fixed manufacturing overhead budget variance is shown below:

The overall fixed manufacturing overhead budget variance for the month = Actual fixed manufacturing overhead cost - The budgeted fixed manufacturing overhead cost

= $17,450 - $17,100

= $350 unfavorable

Since as the actual fixed manufacturing overhead cost exceeds than the budgeted fixed manufacturing overhead cost so this leads to unfavorable variance