Songster 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 3,500 machine-hours.The company actually worked 3,700 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,820 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A) $2,432 Favorable
B) $2,432 Unfavorable
C) $420 Favorable
D) $420 Unfavorable

Question

Songster 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 3,500 machine-hours.The company actually worked 3,700 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,820 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A) $2,432 Favorable 
B) $2,432 Unfavorable 
C) $420 Favorable 
D) $420 Unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $26,180 - $26,600 = $420 F

Songster Corporation Applies Manufacturing Overhead to Products on the Basis