Question

Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity 8,600 MHs Actual level of activity 8,700 MHs Standard variable manufacturing overhead rate $ 5.80 per MH Budgeted fixed manufacturing overhead cost $ 51,000 Actual total variable manufacturing overhead $ 52,600 Actual total fixed manufacturing overhead $ 55,100 What was the fixed manufacturing overhead budget variance for the month?a.$4,200 Unfavorable b.$590 Unfavorable c.$590 Favorable d.$4,200 Favorable

Answer 1

Answer:

$4,100 Unfavorable

Explanation:

Data provided as per the question

Budgeted fixed overhead cost = $51,000

Actual fixed overhead cost = $55,100

The computation of the fixed manufacturing overhead budget variance is given below:-

Budget variance = Budgeted fixed overhead cost - Actual fixed overhead cost

= $51,000 - $55,100

= $4,100 Unfavorable

In the given question the right answer is not available. So, the right answer is $4,100 unfavorable.