Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours.For June,the company's manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine-hours: During June,17,000 machine-hours were used to complete 13,000 units of product,and the following actual total overhead costs were incurred: At standard,each unit of finished product requires 1.4 hours of machine time. The fixed manufacturing overhead budget variance (in total)for June was:
A)$3,230 F
B)$3,230 U
C)$1,180 F
D)$1,180 U

Question

Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours.For June,the company's manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine-hours:  During June,17,000 machine-hours were used to complete 13,000 units of product,and the following actual total overhead costs were incurred:  At standard,each unit of finished product requires 1.4 hours of machine time. The fixed manufacturing overhead budget variance (in total)for June was:
A)$3,230 F 
B)$3,230 U 
C)$1,180 F 
D)$1,180 U

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= ($19,320 + $9,500)- ($20,500 + $9,500)
= $28,820 - $30,000
= $1,180 Fs

Pohl Corporation Uses a Standard Cost System in Which Manufacturing