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Lady bird [3.3K]
3 years ago
15

Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard mac

hine-hours (MHs). The company has provided the following data for the most recent month:
Budgeted level of activity 10,300 MHs
Actual level of activity 10,400 MHs
Standard variable manufacturing overhead rate $7.50 per MH
Budgeted fixed manufacturing overhead cost $68,000
Actual total variable manufacturing overhead $69,600
Actual total fixed manufacturing overhead $73,800

Required:
What was the fixed manufacturing overhead budget variance for the month?
Business
1 answer:
Diano4ka-milaya [45]3 years ago
3 0

Answer:

$5,800(U)

Explanation:

Given that;

The fixed manufacturing overhead budget variance is the difference between budgeted fixed manufacturing overhead cost and actual fixed manufacturing overhead cost.

Budgeted fixed overhead cost = Budgeted fixed manufacturing overhead cost - Actual total fixed manufacturing overhead cost

= $68,000 - $73,800

= $5,800 (U)

The variance is an unfavorable since the actual overhead cost of $73,800 is more than the budgeted cost of $68,000

Therefore, the fixed manufacturing overhead budget variance for the month is $5,800(U)

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