A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period:
The fixed manufacturing overhead budget variance for the period is closest to:
A) $2,440 F
B) $1,200 U
C) $1,999 U
D) $704 F

Question

A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:
 The fixed manufacturing overhead budget variance for the period is closest to:
A) $2,440 F 
B) $1,200 U 
C) $1,999 U 
D) $704 F

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead cost
= $18,560 − $17,360
= $1,200 U

A Furniture Manufacturer Uses a Standard Costing System in Which