(Appendix 10A) Rainbolt Incorporated makes a single product--an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

-The fixed overhead budget variance is:
A) $20,000 U
B) $400 U
C) $20,000 F
D) $400 F

Question

(Appendix 10A) Rainbolt Incorporated makes a single product--an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:
 
-The fixed overhead budget variance is:
A) $20,000 U 
B) $400 U 
C) $20,000 F 
D) $400 F

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead
= $363,000 - $343,000 = $20,000 U

(Appendix 10A) Rainbolt Incorporated Makes a Single Product--An Electrical Motor