Hugh Corporation Applies Manufacturing Overhead to Products on the Basis

question 79

Multiple Choice

Hugh Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below: $\begin{array}{c}\begin{array}{lll}\\\text {Fixed overhead costs:}\\\text {Supervision..........................}\\\text {Utilities...............................}\\\text {Factory depreciation...........}\\\text {Total fixed overhead cost....} \end{array}\begin{array}{c}\text { Original Budget }&\text { Actual Costs }\\\\\$ 12,800 & \$ 12,650 \\5,300 & 5,470 \\\underline{8,700} & \underline{9,050} \\ \underline{\$ 26,800} & \underline{\$ 27,170}\end{array}\end{array}$
The company based its original budget on 6,700 machine-hours.The company actually worked 6,810 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6,940 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?

• A)$960 favorable
• B)$370 unfavorable
• C)$960 unfavorable
• D)$370 favorable

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