Mclellan Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the month appear below:
The company based its original budget on 6,100 machine-hours.The company actually worked 6,480 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,370 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A) $500 Favorable
B) $500 Unfavorable
C) $1,570 Favorable
D) $1,570 Unfavorable

Question

Mclellan Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the month appear below:
 The company based its original budget on 6,100 machine-hours.The company actually worked 6,480 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,370 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A) $500 Favorable 
B) $500 Unfavorable 
C) $1,570 Favorable 
D) $1,570 Unfavorable

Quizplus · Accepted Answer

11ea7761_1730_0fc8_81a5_b935a8d6b4be_TB2580_00 Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $26,600 - $27,100 = $500 F

Mclellan Corporation Applies Manufacturing Overhead to Products on the Basis