(Appendix 11A)Coblentz Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs)at $6.20 per MH.The company had budgeted its fixed manufacturing overhead cost at $40, 000 for the month.During the month, the actual total variable manufacturing overhead was $48, 970 and the actual total fixed manufacturing overhead was $43, 000.The actual level of activity for the period was 8, 300 MHs.What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A)$2, 490 Favorable
B)$510 Favorable
C)$510 Unfavorable
D)$2, 490 Unfavorable

Question

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $43, 000 - $40, 000
= $3, 000 U
Variable overhead rate variance = (AH × AR)- (AH × SR)
= $48, 970 - (8, 300 MHs × $6.20 per MH)
= $48, 970 - $51, 460
= $2, 490 F
Total variance = $3, 000 U + $2, 490 F = $510 U

(Appendix 11A)Coblentz Fabrication Corporation Has a Standard Cost System in Which