(Appendix 11A)Omary Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month: What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A)$1, 520 Unfavorable
B)$3, 180 Favorable
C)$4, 820 Unfavorable
D)$6, 340 Unfavorable

Question

(Appendix 11A)Omary Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month:  What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A)$1, 520 Unfavorable 
B)$3, 180 Favorable 
C)$4, 820 Unfavorable 
D)$6, 340 Unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $54, 000 - $50, 000
= $4, 000 U
Variable overhead rate variance = (AH × AR)- (AH × SR)
= $31, 980 - (4, 100 MHs × $7.60 per MH)
= $31, 980 - $31, 160
= $820 U
Total variance = $4, 000 U + $820 U = $4, 820 U

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