(Appendix 11A)Cuda Manufacturing Corporation uses a standard cost system with machine-hours (MHs)as the activity base for overhead.The following information relates to Cuda's operations last year: What was Cuda's fixed manufacturing overhead budget variance?
A)$9, 000 Favorable
B)$15, 000 Unfavorable
C)$45, 000 Favorable
D)$45, 000 Unfavorable

Question

(Appendix 11A)Cuda Manufacturing Corporation uses a standard cost system with machine-hours (MHs)as the activity base for overhead.The following information relates to Cuda's operations last year:  What was Cuda's fixed manufacturing overhead budget variance?
A)$9, 000 Favorable 
B)$15, 000 Unfavorable 
C)$45, 000 Favorable 
D)$45, 000 Unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead
= $615, 000 - (50, 000 MHs × $12 per MH)
= $615, 000 - $600, 000
= $15, 000 U

(Appendix 11A)Cuda Manufacturing Corporation Uses a Standard Cost System with Machine-Hours