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: 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:  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

Budget variance = Actual fixed manufacturing overhead cost - Budgeted fixed manufacturing overhead cost = $27,170 - $26,800 = $370 U

Hugh Corporation Applies Manufacturing Overhead to Products on the Basis