Budgeted fixed manufacturing overhead
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Zotta Enterprises uses standard costing and applies manufacturing overhead cost to products on the basis of standard direct labor-hours (DLHs). Budgeted and actual data relating to manufacturing overhead for last year appear below:
Actual fixed overhead cost 38,900
Denominator activity 20,000 DLHs
Standard hours allowed for one unit 1.2 DLHs
Units produced 17,000 units
Fixed overhead budget variance 1,300 Unfavorable
Reference: 11-13
The budgeted fixed manufacturing overhead cost was:
38,900
37,600
40,200
24,000
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This provides the steps to calculate the budgeted fixed manufacturing overhead
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