Asked by matthew winter on Jun 11, 2024

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Maertz Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The budgeted fixed manufacturing overhead cost for the most recent month was $10,890 and the actual fixed manufacturing overhead cost for the month was $10,540.The company based its original budget on 3,300 machine-hours.The standard hours allowed for the actual output of the month totaled 3,240 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?

A) $198 Unfavorable
B) $350 Unfavorable
C) $198 Favorable
D) $350 Favorable

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as salaries of managers, rent of the factory, and depreciation of manufacturing equipment.

Budget Variance

The difference between budgeted figures for revenue or spending and the actual amounts incurred.

Machine-Hours

A measure of production time, calculated by the number of hours machines are operating as part of the manufacturing process.

  • Acquire knowledge on the elementary principles involved in variance analysis for manufacturing overhead.
  • Ascertain the variances in fixed and variable overhead expenses, factoring in budget and volume deviations.
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MB
Miriam B. PerezJun 14, 2024
Final Answer :
D
Explanation :
Budget variance = Actual fixed overhead - Budgeted fixed overhead cost
= $10,540 - $10,890 = $350 F