Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:
| Budgeted level of activity | 10,100 | MHs | |
| Actual level of activity | 10,200 | MHs | |
| Standard variable manufacturing overhead rate | $ | 7.30 | per MH |
| Budgeted fixed manufacturing overhead cost | $ | 66,000 | |
| Actual total variable manufacturing overhead | $ | 67,600 | |
| Actual total fixed manufacturing overhead | $ | 71,600 | |
What was the fixed manufacturing overhead budget variance for the month?
Multiple Choice
Explanation
Budget variance = Actual fixed overhead – Budgeted fixed overhead cost
= $71,600 – $66,000
= $5,600 U
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