Teall Corporation has a standard cost system in which it applies manufacturing o

Question

Teall 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: Budgeted level of activity Actual level of activity Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead cost Actual total variable manufacturing overhead Actual total fixed manufacturing overhead 8,500 MHs 8,600 MHs $5.70 per MH $50,000 $51,600 $54,000 Skipped Print What was the fixed manufacturing overhead budget variance for the month?

Explanation / Answer

Since, actual overhead cost is more than budgeted overhead. so it will be Unfavourable

Fixed manufacturing overhead budget variance = Actual fixed manufacturing overhead - Budgeted fixed manufacturing overhead Fixed manufacturing overhead budget variance = $54,000 - $50,000 Fixed manufacturing overhead budget variance = $4,000 Unfavorable

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