A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead budget variance for the period is closest to:
A)$4,470 U
B)$950 U
C)$2,790 F
D)$1,381 U

Question

A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead budget variance for the period is closest to:
A)$4,470 U 
B)$950 U 
C)$2,790 F 
D)$1,381 U

Quizplus · Accepted Answer

The fixed manufacturing overhead budget variance is calculated by comparing the actual fixed overhead costs to the budgeted fixed overhead costs. The choice closest to the calculated variance is $950 unfavorable (U).

A Manufacturer of Playground Equipment Uses a Standard Costing System