Goolden Electronics Corporation Has a Standard Cost System in Which

question 128

Multiple Choice

Goolden Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) .The company had budgeted its fixed manufacturing overhead cost at $58,000 for the month and its level of activity at 2,500 MHs.The actual total fixed manufacturing overhead was $61,200 for the month and the actual level of activity was 2,600 MHs.What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?

• A) $880 Unfavorable
• B) $880 Favorable
• C) $3,200 Favorable
• D) $3,200 Unfavorable

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Definitions:

Statutory Restrictions

Legal limitations placed on a company, which can affect its operations and practices, often set by government regulations.

Contractual Restrictions

Limitations imposed by a contract, dictating what parties can or cannot do as per the agreement terms.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Stockholders' Claims

The rights of shareholders to a company's assets, often in the context of liquidation or dividend distributions.