Faessler Corporation Applies Overhead to Products Based on Machine-Hours

question 69

Essay

Faessler Corporation applies overhead to products based on machine-hours. The denominator level of activity is 6,500 machine-hours. The budgeted fixed manufacturing overhead costs are $242,450. In July, the actual fixed manufacturing overhead costs were $242,490 and the standard machine-hours allowed for the actual output were 7,000 machine-hours.
Required:
a. Compute the budget variance for July. Show your work!
b. Compute the volume variance for July. Show your work!

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