A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs) as 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) $3,595 U
B) $550 F
C) $2,763 U
D) $784 F

Question

A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs) as 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) $3,595 U 
B) $550 F 
C) $2,763 U 
D) $784 F

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead cost
= $58,320 − $58,870 = $550 F

A Manufacturer of Playground Equipment Has a Standard Costing System