Use the information below to answer the following question(s).Michelle Inc.uses a level 4-variance analysis of its manufacturing overhead costs, and has the following results for April.A.Budgeted direct labour-hours per unit is used to allocate variable manufacturing overhead.Fixed overhead is allocated on a per unit basis.
b.Budgeted amounts for April are:
C.Actual amounts for April are:

-What are the fixed manufacturing overhead efficiency and production-volume variances, respectively?
A)0; $200,000 favourable
B)0; $200,000 unfavourable
C)$50,500 favourable; $199,998 unfavourable
D)$50,500 unfavourable; $199,998 favourable
E)There is no efficiency variance; $200,000 favourable.

Question

Use the information below to answer the following question(s).Michelle Inc.uses a level 4-variance analysis of its manufacturing overhead costs, and has the following results for April.A.Budgeted direct labour-hours per unit is used to allocate variable manufacturing overhead.Fixed overhead is allocated on a per unit basis.
b.Budgeted amounts for April are:
  C.Actual amounts for April are:
 
-What are the fixed manufacturing overhead efficiency and production-volume variances, respectively?
A)0; $200,000 favourable 
B)0; $200,000 unfavourable 
C)$50,500 favourable; $199,998 unfavourable 
D)$50,500 unfavourable; $199,998 favourable 
E)There is no efficiency variance; $200,000 favourable.

Quizplus · Accepted Answer

There is no efficiency variance for fixed manufacturing overhead because it is not affected by the level of production activity. The production-volume variance is $200,000 favourable, indicating that actual production exceeded the expected level.

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