Bartoletti Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs)at $4.60 per MH.The company had budgeted its fixed manufacturing overhead cost at $65,000 for the month.During the month,the actual total variable manufacturing overhead was $22,080 and the actual total fixed manufacturing overhead was $63,000.The actual level of activity for the period was 4,600 MHs.What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A) $1,080 Unfavorable
B) $1,080 Favorable
C) $920 Unfavorable
D) $920 Favorable

Question

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $63,000 - $65,000
= $2,000 F
Variable overhead rate variance = (AH × AR) - (AH × SR)
= $22,080 - (4,600 MHs × $4.60 per MH)
= $22,080 - $21,160
= $920 U
Total variance = $2,000 F + $920 U = $1,080 F

Bartoletti Fabrication Corporation Has a Standard Cost System in Which