Bradford Manufacturing produces luxury dog houses. Each dog house requires 5.0 h

Question

Bradford Manufacturing produces luxury dog houses. Each dog house requires 5.0 hours of machine time for its elaborate trim and finishing. For the current year, Bradford calculated its predetermined fixed manufacturing overhead (MOH) rate to be $20 per machine hour. The company budgets its fixed MOH to be $203,500 per month. Last month, Bradford produced 2,100 dog houses and incurred $198,700 (actual) of fixed MOH. Read the requirements Requirement 1. Calculate the fixed overhead budget variance Begin by determining the formula for the fixed overhead budget variance, then compute the variance. (Enter the variance as a positive number. Label the variance as favorable (F) or unfavorable (U).) Fixed MOH = budget variance

Explanation / Answer

Fixed overhead budget variance = Actual fixed overhead - Budgeted fixed overhead = $198,700 - $203,500 = $ (4,800.00)Favourable

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