Moralez Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month: What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A)$380 unfavorable
B)$1,620 favorable
C)$1,660 unfavorable
D)$3,280 unfavorable

Question

Moralez Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company has provided the following data for the most recent month:   What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
A)$380 unfavorable 
B)$1,620 favorable 
C)$1,660 unfavorable 
D)$3,280 unfavorable

Quizplus · Accepted Answer

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $70,000 - $71,000 = $1,000 F
Variable overhead rate variance = (AH F1F1F1S1F1F1F10 AR)- (AH F1F1F1S1F1F1F10 SR)
= $24,800 - (3,100 MHs F1F1F1S1F1F1F10 $8.20 per MH)
= $24,800 - $25,420 = $620 F
Total variance = $1,000 F + $620 F = $1,620 F

Moralez Corporation Has a Standard Cost System in Which It