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.

---

Definitions:

Empowering Others

The act of delegating authority and fostering self-reliance in individuals or groups to enhance their confidence and capability to make decisions.

Stamina

The physical or mental endurance to sustain prolonged stressful effort or activity.

Essential Requirement

A fundamental need or condition that is absolutely necessary for something to occur or be achieved.

Successful Leadership

The effective guidance and influence exerted by a leader that results in the achievement of group or organizational goals.