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A Manufacturing Company Has a Standard Costing System Based on Machine

Question 110

Multiple Choice

A manufacturing company has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
 Denominator Level of Activity 6,100MHs Overhead Costs at the Denominator Activity Level:  Variable Overhead Cost $35,075 Fixed Overhead Cost $77,775\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 6,100 \mathrm{MHs} \\\hline \text { Overhead Costs at the Denominator Activity Level: } & \\\hline \text { Variable Overhead Cost } & \$ 35,075 \\\hline \text { Fixed Overhead Cost } & \$ 77,775 \\\hline\end{array}
The following data pertain to operations for the most recent period:
 Actual Hours 6,300MHs Standard Hours Allowed for the Actual Output 5,994MHs Actual Total Variable Overhead Cost $36,540 Actual Total Fixed Overhead Cost $76,875\begin{array}{|l|r|}\hline \text { Actual Hours } & 6,300 \mathrm{MHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 5,994 \mathrm{MHs} \\\hline \text { Actual Total Variable Overhead Cost } & \$ 36,540 \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 76,875 \\\hline\end{array}
-What was the fixed overhead volume variance for the period,rounded to the nearest dollar?


A) $1,352 unfavourable.
B) $1,359 unfavourable.
C) $2,550 favourable.
D) $3,902 unfavourable.

Correct Answer:

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