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:

European Imports

Goods and services brought into European countries from other parts of the world, often involving trade agreements and economic policies.

Northeast Indians

Indigenous peoples native to the northeastern part of North America, including tribes such as the Iroquois and Algonquin.

African Slavery

The forced bondage and labor of African people transported to various parts of the world, particularly the Americas, between the 16th and 19th centuries.

Colonization

The act of establishing control over foreign lands and peoples, often involving settlement and exploitation, historically by European powers.