Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:

-What is the flexible-budget variance for variable manufacturing overhead?
A)$2,250 favorable
B)$2,250 unfavorable
C)zero
D)None of these answers are correct.

Question

Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
  
-What is the flexible-budget variance for variable manufacturing overhead?
A)$2,250 favorable 
B)$2,250 unfavorable 
C)zero 
D)None of these answers are correct.

Quizplus · Accepted Answer

The flexible-budget variance for variable manufacturing overhead is calculated by comparing the actual costs incurred to the flexible budget amount for the actual level of activity. A favorable variance indicates that the actual costs were less than the budgeted costs.

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