Michetti 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 4,300 machine-hours.The company actually worked 4,140 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 4,200 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$660 favorable
B)$660 unfavorable
C)$850 unfavorable
D)$850 favorable

Question

Michetti 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 4,300 machine-hours.The company actually worked 4,140 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 4,200 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$660 favorable 
B)$660 unfavorable 
C)$850 unfavorable 
D)$850 favorable

Quizplus · Accepted Answer

Budget variance = Actual fixed manufacturing overhead cost - Budgeted fixed manufacturing overhead cost = ($13,420 + $5,520 + $7,710) - ($13,000 + $5,100 + $7,700) = $26,650 - $25,800 = $850 U

Michetti Corporation Applies Manufacturing Overhead to Products on the Basis