Meister Electronics Corporation Has a Standard Cost System in Which

question 68

Multiple Choice

Meister Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) .The company had budgeted its fixed manufacturing overhead cost at $68,800 for the month and its level of activity at 2,000 MHs.The actual total fixed manufacturing overhead was $73,300 for the month and the actual level of activity was 1,800 MHs.What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?

• A)$11,380 unfavorable
• B)$4,500 unfavorable
• C)$11,380 favorable
• D)$4,500 favorable

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Definitions:

Revaluation

An adjustment made to the book value of an asset to accurately reflect its current market value.

Prepaid Insurance

An asset account on the balance sheet representing insurance payments made in advance, which are expensed out over the period to which the insurance coverage relates.

Insurance Expense

The cost incurred by an entity for obtaining insurance coverage, typically recognized as an expense in the income statement.

Adjusting Entry

An accounting entry made at the end of a period to allocate income and expenditure to the appropriate years.