Tropiano Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company had budgeted its fixed manufacturing overhead cost at $62,100 for the month and its level of activity at 3,200 MHs. The actual total fixed manufacturing overhead was $61,600 for the month and the actual level of activity was 3,000 MHs. What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?
A)$3,381 Unfavorable
B)$500 Favorable
C)$500 Unfavorable
D)$3,381 Favorable

Question

Quizplus · Accepted Answer

The fixed manufacturing overhead budget variance is calculated as the difference between the budgeted fixed overhead and the actual fixed overhead. The budgeted fixed overhead was $62,100, and the actual fixed overhead was $61,600. Therefore, the variance is $62,100 - $61,600 = $500 Favorable.

Tropiano Electronics Corporation Has a Standard Cost System in Which