Hugh 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: $\begin{array}{c}
\begin{array}{lll}
\
\text {Fixed overhead costs:}\
\text {Supervision..........................}\
\text {Utilities...............................}\
\text {Factory depreciation...........}\
\text {Total fixed overhead cost....}
\end{array}
\begin{array}{c}
\text { Original Budget }&\text { Actual Costs }\
\
\$ 12,800 & \$ 12,650 \
5,300 & 5,470 \
\underline{8,700} & \underline{9,050} \
\underline{\$ 26,800} & \underline{\$ 27,170}
\end{array}
\end{array}$
The company based its original budget on 6,700 machine-hours.The company actually worked 6,810 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,940 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$960 favorable
B)$370 unfavorable
C)$960 unfavorable
D)$370 favorable

Question

Hugh 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: $\begin{array}{c}
\begin{array}{lll}
\
\text {Fixed overhead costs:}\
\text {Supervision..........................}\
\text {Utilities...............................}\
\text {Factory depreciation...........}\
\text {Total fixed overhead cost....} 
\end{array}
\begin{array}{c}
\text { Original Budget }&\text { Actual Costs }\
\
\$ 12,800 & \$ 12,650 \
5,300 & 5,470 \
\underline{8,700} & \underline{9,050} \
 \underline{\$ 26,800} & \underline{\$ 27,170}
\end{array}
\end{array}$
 The company based its original budget on 6,700 machine-hours.The company actually worked 6,810 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,940 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$960 favorable
B)$370 unfavorable
C)$960 unfavorable
D)$370 favorable

Quizplus · Accepted Answer

The overall fixed manufacturing overhead budget variance is calculated as the difference between the actual fixed overhead costs and the budgeted fixed overhead costs. The actual costs were $27,170, and the budgeted costs were $26,800, resulting in a $370 unfavorable variance ($27,170 - $26,800 = $370).

Hugh Corporation Applies Manufacturing Overhead to Products on the Basis