Behring Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below: The company based its original budget on 3,200 machine-hours.The company actually worked 3,170 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,250 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?
A)$435 favorable
B)$261 unfavorable
C)$435 unfavorable
D)$261 favorable

Question

Behring Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below:  The company based its original budget on 3,200 machine-hours.The company actually worked 3,170 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,250 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?
A)$435 favorable 
B)$261 unfavorable 
C)$435 unfavorable 
D)$261 favorable

Quizplus · Accepted Answer

Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process
Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost F1F1F1S1F1F1F10 Estimated total amount of the allocation base = $27,840 F1F1F1S1F1F1F10 3,200 machine-hours = $8.70 per machine-hour
= $27,840 - (3,250 machine-hours F1F1F1S1F1F1F10 $8.70 per machine-hour)
= $27,840 - $28,275 = $435 F

Behring Corporation Applies Manufacturing Overhead to Products on the Basis