Nodine Fabrication Corporation Has a Standard Cost System in Which

question 139

Multiple Choice

Nodine Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) . The company's cost formula for variable overhead is $7.50 per MH. The company had budgeted its fixed manufacturing overhead cost at $48,000 for the month. During the month, the actual total variable overhead was $59,760 and the actual total fixed manufacturing overhead was $45,000. The actual level of activity for the period was 8,300 MHs. What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?

• A) $2,490 favorable
• B) $5,490 favorable
• C) $5,490 unfavorable
• D) $2,490 unfavorable

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Definitions:

Showrooming

The practice of examining merchandise in a physical retail store but then purchasing it online for a lower price.

Examining Products

The process of thoroughly inspecting and analyzing a product for quality, functionality, and compliance with standards.

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