Sultzer 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 3,000 machine-hours.The company actually worked 2,730 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,690 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$3,317 favorable
B)$160 unfavorable
C)$3,317 unfavorable
D)$160 favorable

Question

Sultzer 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 3,000 machine-hours.The company actually worked 2,730 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,690 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$3,317 favorable 
B)$160 unfavorable 
C)$3,317 unfavorable 
D)$160 favorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $31,940 - $32,100 = $160 F

Sultzer Corporation Applies Manufacturing Overhead to Products on the Basis