Vette Tie Corporation has developed the following manufacturing overhead standards to use in applying overhead to the production of its hand-painted silk ties.Manufacturing overhead at Vette is applied to production on the basis of standard direct labor-hours (DLHs). The above standards were based on an expected annual volume of 60,000 ties.The actual results for last year were as follows: What was Vette's fixed manufacturing overhead budget variance?
A)$1,600 Unfavorable
B)$3,000 Favorable
C)$13,000 Unfavorable
D)$17,600 Unfavorable

Question

Vette Tie Corporation has developed the following manufacturing overhead standards to use in applying overhead to the production of its hand-painted silk ties.Manufacturing overhead at Vette is applied to production on the basis of standard direct labor-hours (DLHs).  The above standards were based on an expected annual volume of 60,000 ties.The actual results for last year were as follows:  What was Vette's fixed manufacturing overhead budget variance?
A)$1,600 Unfavorable 
B)$3,000 Favorable 
C)$13,000 Unfavorable 
D)$17,600 Unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead
= $525,000 - $528,000
= $3,000 F

Vette Tie Corporation Has Developed the Following Manufacturing Overhead Standards