Question

Derf corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours. two direct labor-hours are required for each unit produced. the denominator activity was set at 9,000 units. manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. the 17,200 hours worked during the period resulted in production of 8,500 units. variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. the fixed manufacturing overhead budget variance for the period was:

Answer 1

Had to look for the options and here is my answer. Based on the given description and details above about Derf Corporation, I can say that the fixed manufacturing overhead budget variance for the period would be $5,300 UNFAVORABLE.