Coskey Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the month appear below: The company based its original budget on 3,900 machine-hours.The company actually worked 3,580 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,770 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$1,280 favorable
B)$320 favorable
C)$320 unfavorable
D)$1,280 unfavorable

Question

Coskey Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the month appear below:  The company based its original budget on 3,900 machine-hours.The company actually worked 3,580 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,770 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$1,280 favorable 
B)$320 favorable 
C)$320 unfavorable 
D)$1,280 unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $27,020 - $26,700 = $320 U

Coskey Corporation Applies Manufacturing Overhead to Products on the Basis