Mclellan 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 6,100 machine-hours.The company actually worked 6,480 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,370 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$500 Favorable
B)$500 Unfavorable
C)$1,570 Favorable
D)$1,570 Unfavorable

Question

Mclellan 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 6,100 machine-hours.The company actually worked 6,480 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,370 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?
A)$500 Favorable 
B)$500 Unfavorable 
C)$1,570 Favorable 
D)$1,570 Unfavorable

Quizplus · Accepted Answer

11ea7998_5d4d_054c_911b_bb2a3a3b7780_TB2627_00_TB2627_00 Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $26,600 - $27,100 = $500 F

Mclellan Corporation Applies Manufacturing Overhead to Products on the Basis