(Appendix 10A) A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead budget variance for the period is closest to:
A) $2,440 F
B) $1,200 U
C) $1,999 U
D) $704 F

Question

(Appendix 10A) A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
  The following data pertain to operations for the most recent period:
 
-The fixed manufacturing overhead budget variance for the period is closest to:
A) $2,440 F 
B) $1,200 U 
C) $1,999 U 
D) $704 F

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $18,560 - $17,360
= $1,200 U

(Appendix 10A) a Furniture Manufacturer Uses a Standard Costing System