Channel One Industries uses a standard costing system to apply manufacturing costs to its production process.In May,Channel One anticipated producing 2,450 units with fixed manufacturing overhead costs allocated at $7.40 per direct labor hour with a standard of 1.5 direct labor hours per unit.In May,actual production was 3,200 units and actual fixed manufacturing overhead costs were $23,000.
What was Channel One's fixed manufacturing overhead budget variance in May?

Question

Quizplus · Accepted Answer

A)
Fixed MOH Budget Variance = Actual fixed overhead costs - Budgeted fixed overhead costs
$4,195 F = $23,000 - ($7.40 × 1.5 × 2,450)

Channel One Industries Uses a Standard Costing System to Apply