A Manufacturer of Playground Equipment Has a Standard Costing System

question 231

Multiple Choice

A manufacturer of playground equipment 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:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 3,000 \mathrm{MHs} \\\hline \text { Fixed Overhead Cost } & \$ 40,650 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 3,400 \mathrm{MHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 3,172 \mathrm{MHs} \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 41,600 \\\hline\end{array}$
-What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

• A) $950 unfavourable.
• B) $1,381 unfavourable.
• C) $2,790 favourable.
• D) $4,470 unfavourable.

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