Bartoletti Fabrication Corporation Has a Standard Cost System in Which

question 125

Multiple Choice

Bartoletti Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $4.60 per MH.The company had budgeted its fixed manufacturing overhead cost at $65,000 for the month.During the month,the actual total variable manufacturing overhead was $22,080 and the actual total fixed manufacturing overhead was $63,000.The actual level of activity for the period was 4,600 MHs.What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?

• A) $1,080 Unfavorable
• B) $1,080 Favorable
• C) $920 Unfavorable
• D) $920 Favorable

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Definitions:

Variable Overhead Costs

Expenses that change with the level of production or business activity, including costs like utilities and indirect materials.

Planning Budget

A budget prepared for a specific level of activity, outlining expected revenues, expenses, and resource requirements.

Employee Salaries

Regular payments made to employees for performing their job duties.

Service Company

A business that earns revenue by providing intangible products or services, as opposed to selling physical goods.