Jessep Corporation has a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. The company has provided the following data concerning its fixed manufacturing overhead costs in March: The fixed manufacturing overhead budget variance is:
A) $1,000 U
B) $3,000 U
C) $2,000 U
D) $2,000 F

Question

Jessep Corporation has a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. The company has provided the following data concerning its fixed manufacturing overhead costs in March:  The fixed manufacturing overhead budget variance is:
A) $1,000 U 
B) $3,000 U 
C) $2,000 U 
D) $2,000 F

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead − Budgeted fixed overhead
= $48,000 − $45,000
= $3,000 U

Jessep Corporation Has a Standard Cost System in Which Manufacturing