Kuhlman Corporation Applies Manufacturing Overhead to Products on the Basis

question 86

Multiple Choice

Kuhlman 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: $\begin{array}{lcc}&\text { Original Budget }&\text { Actual Costs }\\\text { Variable overhead costs: }\\\text { Supplies.......................... } & \$ 4,480 & \$ 4,310 \\\text { Indirect labor.................. } & 3,360 & 3,630\\\text { Fixed overhead costs:} &\\ \text { Supervision..................... } &2,800&2,8100\\ \text { Utilities...........................} &7,840&7,820\\ \text { Factory depreciation....... } &\underline{14,280}&\underline{14,260}\\ \text { Total overhead cost......... } &\underline{\$32,760}&\underline{\$32,830}\end{array}$
The company based its original budget on 2,800 machine-hours.The company actually worked 2,730 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,860 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?

• A)$623 unfavorable
• B)$534 unfavorable
• C)$623 favorable
• D)$534 favorable

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Definitions:

Rent Expense

The cost incurred from leasing a property or equipment for business operations, recognized as an expense on the income statement.

Adjusted Balances

Pertains to financial statements or account balances that have been modified to reflect corrections, adjustments, or reconciliations.

Accounts

Represents records in accounting that track financial transactions of various types, such as assets, liabilities, equity, expenses, and revenue.

Accumulated Depreciation

The entire value of the depreciation expense assigned to a tangible asset since its initial use.