Web Company Uses a Standard Cost System in Which Manufacturing

question 76

Multiple Choice

Web Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours. During February, the company used a denominator activity of 80,000 machine-hours in computing its predetermined overhead rate. However, only 75,000 standard machine-hours were allowed for the month's actual production. If the fixed manufacturing overhead volume variance for February was $6,400 unfavorable, then the total budgeted fixed manufacturing overhead cost for the month was:

• A) $96,000
• B) $102,400
• C) $100,000
• D) $98,600

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