Mzimba Sofa Company Has Developed the Following Manufacturing Overhead Standards

question 21

Multiple Choice

Mzimba Sofa Company has developed the following manufacturing overhead standards for its sofa production. Manufacturing overhead at Mzimba is applied to production on the basis of standard machine-hours. The above standards were based on an expected annual volume of 20,000 sofas. The actual results last year were as follows:
-What was Mzimba's fixed manufacturing overhead volume variance?

• A) $12,080 favorable
• B) $42,920 unfavorable
• C) $61,000 unfavorable
• D) $73,080 favorable

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Definitions:

Actual Results

The outcomes or data obtained from real operations or experiments, not based on forecasts or estimates.

Direct Material Price Variance

The difference between the actual cost and the standard cost of raw materials used in the production process.

Purchasing Manager

A professional responsible for overseeing the acquisition of goods and services for a company, ensuring the best deals in terms of quality and price.

Sales Manager

A professional responsible for directing and overseeing a company's sales team and strategies.