A manufacturing company 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) $615 F
B) $2,120 U
C) $1,478 U
D) $450 U

Question

A manufacturing company 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) $615 F 
B) $2,120 U 
C) $1,478 U 
D) $450 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead cost
= $47,995 − $47,545 = $450 U

A Manufacturing Company Has a Standard Costing System Based on Standard