A Manufacturing Company Has a Standard Costing System Based on Machine

question 68

Multiple Choice

A manufacturing company has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 6,100 \mathrm{MHs} \\\hline \text { Overhead Costs at the Denominator Activity Level: } & \\\hline \text { Variable Overhead Cost } & \$ 35,075 \\\hline \text { Fixed Overhead Cost } & \$ 77,775 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 6,300 \mathrm{MHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 5,994 \mathrm{MHs} \\\hline \text { Actual Total Variable Overhead Cost } & \$ 36,540 \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 76,875 \\\hline\end{array}$
-What was the fixed overhead volume variance for the period,rounded to the nearest dollar?

• A) $1,352 unfavourable.
• B) $1,359 unfavourable.
• C) $2,550 favourable.
• D) $3,902 unfavourable.

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Definitions:

Pesticides

Chemical substances used to eliminate or control pests that threaten agriculture, public health, or comfort.

Iodine

A trace element essential for the synthesis of thyroid hormones, which regulate metabolism, growth, and development.

Foodborne Illnesses

Illnesses resulting from the consumption of contaminated food, typically caused by bacteria, viruses, or parasites.

Pathogens

Microorganisms such as bacteria, viruses, fungi, and parasites that can cause disease in humans or animals.