Jaune Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs).The following data pertain to last month's operations: The fixed manufacturing overhead budget variance is:
A)$500 U
B)$500 F
C)$2,200 U
D)$1,700 U

Question

Jaune Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs).The following data pertain to last month's operations:  The fixed manufacturing overhead budget variance is:
A)$500 U 
B)$500 F 
C)$2,200 U 
D)$1,700 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $5,500 - $5,000 = $500 U

Jaune Company Uses a Standard Cost System in Which It