Aymond Electronics Corporation has a standard cost system in which it applies ma

Question

Aymond Electronics Corporation has a standard cost system in which it applies manufacturing overheas to products on the basis of standard machine-hours(MHs). The company had budgeted its fixed manufacturing overhead cost at $42,700 for the month and its level of activity at 2,000 MHs. The actual total fixed manufacturing overhead was $44,100 for the month and the actual level of activity was 1,800 MHs.

Q: What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?

A: $5,670 Favorable

B: $1,400 Favorable

C: $5,670 Unfavorable

D: $1,400 Unfavorable

Explanation / Answer

Variance = Budgeted - Actual
Variance = 42,700 - 44,100
Variance = -1,400
Since actual is more than budgeted so its unfavorable

D: $1,400 Unfavorable......(answer)

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