Jaune Company Uses a Standard Cost System That Applies Manufacturing

question 185

Multiple Choice

Jaune 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's operations:
$\begin{array}{|l|r|}\hline \text { Budgeted Fixed Overhead Costs } & \$ 5,000 \\\hline \text { Actual Fixed Overhead Costs } & \$ 5,000 \\\hline \text { Standard Hours Allowed for Output } & 2,400 \text { DLHs } \\\hline \text { Predetermined Overhead Rate (\$2 variable }+\$ 3 \text { fixed) } & \$ 5 \text { per DLH } \\\hline\end{array}$
What was the fixed overhead budget variance?

• A) $500 favourable.
• B) $500 unfavourable.
• C) $1,700 unfavourable.
• D) $2,200 unfavourable.

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Retail List Price

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