Mauve Company Uses a Standard Cost System That Applies Manufacturing

question 9

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:
$\begin{array}{|l|r|}\hline \text { Actual Hours Worked } & 2,400 \mathrm{DLHs} \\\hline \text { Budgeted Fixed Overhead Costs } & \$ 10,000 \\\hline \text { Actual Fixed Overhead Costs } & \$ 10,400 \\\hline \text { Standard Hours Allowed } & 2,500 \mathrm{DLHs} \\\hline \text { Predetermined Overhead Rate } & \$ 5 \text { per DLH } \\\hline\end{array}$
What was the fixed overhead budget variance?

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

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