Mauve Company Uses a Standard Cost System That Applies Manufacturing

question 134

Multiple Choice

Mauve Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs) .The following data pertain to last month: $\begin{array} { l r } \text { Actual Hours Worked } & 2,400 \mathrm { DLHs } \\\text { Budgeted Fixed Overhead Costs } & \$ 10,000 \\\text { Actual Fixed Overhead Costs } & \$ 10,400 \\\text { Standard Hours Allowed } & 2,500 \mathrm { DLHs } \\\text { Predetermined Overhead Rate } & \$ 5 \text { per DLH }\end{array}$
What was the fixed overhead budget variance?

• A) $300 favourable.
• B) $300 unfavourable.
• C) $400 unfavourable.
• D) $500 favourable.

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