A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead budget variance for the period is closest to:
A)$2,675 U
B)$1,450 F
C)$3,691 F
D)$1,270 F

Question

A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead budget variance for the period is closest to:
A)$2,675 U 
B)$1,450 F 
C)$3,691 F 
D)$1,270 F

Quizplus · Accepted Answer

The fixed manufacturing overhead budget variance is calculated by comparing the actual fixed overhead costs to the budgeted fixed overhead costs. A favorable (F) variance indicates that the actual costs were less than the budgeted costs.

A Furniture Manufacturer Uses a Standard Costing System in Which