Question

River Mills manufactures reproduction antique furniture using historic manufacturing methods. River often uses​ waterpower, which is not only historically​ accurate, but also saves energy costs. Although River uses oldminusfashioned manufacturing techniques it is still a modern company that performs modern business analysis. River incurred actual fixed manufacturing overhead costs of​ $265,000. Using standard​ costing, River allocated​ $255,000 in fixed manufacturing overhead costs. If River observed a​ $1,500 unfavorable fixed manufacturing overhead volume​ variance, what amount ha

Answer 1

Complete Question

River Mills manufactures reproduction antique furniture using historic manufacturing methods. River often uses​ waterpower, which is not only historically​ accurate, but also saves energy costs. Although River uses oldminus fashioned manufacturing techniques it is still a modern company that performs modern business analysis. River incurred actual fixed manufacturing overhead costs of​ $265,000. Using standard​ costing, River allocated​ $255,000 in fixed manufacturing overhead costs. If River observed a​ $1,500 unfavorable fixed manufacturing overhead volume​ variance, what amount had management budgeted for fixed manufacturing overhead?

Answer:

The budgeted fixed manufacturing overhead is R = $256500

Step-by-step explanation:

From the question we are told that

The actual actual fixed manufacturing overhead costs is k = $265,000

The fixed manufacturing overhead costs is u = $255,000

The fixed manufacturing overhead volume​ variance c = $ 1,500

The budgeted fixed manufacturing overhead is

`R = u+c`

substituting values

`R = 255000 + 1500`

R = $256500