Mclellan Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the month appear below: The company based its original budget on 6,100 machine-hours. The company actually worked 6,480 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,370 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?
A) $500 Favorable
B) $500 Unfavorable
C) $1,570 Favorable
D) $1,570 Unfavorable

Question

Mclellan Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the month appear below:  The company based its original budget on 6,100 machine-hours. The company actually worked 6,480 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,370 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?
A) $500 Favorable 
B) $500 Unfavorable 
C) $1,570 Favorable 
D) $1,570 Unfavorable

Quizplus · Accepted Answer

11eacbfc_c7ec_bf55_8ffe_4d49372b86ab_TB7552_00 Budget variance = Actual fixed overhead − Budgeted fixed overhead cost = $26,600 − $27,100 = $500 F

Mclellan Corporation Applies Manufacturing Overhead to Products on the Basis