Acuff Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below: The company based its original budget on 6,200 machine-hours.The company actually worked 6,560 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,420 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$320 Favorable
B)$320 Unfavorable
C)$972 Favorable
D)$972 Unfavorable

Question

Acuff Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below:  The company based its original budget on 6,200 machine-hours.The company actually worked 6,560 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,420 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$320 Favorable 
B)$320 Unfavorable 
C)$972 Favorable 
D)$972 Unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $27,720 - $27,400 = $320 U

Acuff Corporation Applies Manufacturing Overhead to Products on the Basis