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Managerial Accounting

Semaan Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the month appear below:

Original Budget Actual Costs
Variable overhead costs:
Supplies 11,340 12,850
Indirect labor 15,120 17,080
Fixed overhead costs:
Supervision 14,900 14,640
Utilities 5,800 6,010
Factory depreciation 9,700 9,410
Total overhead cost 56,860 59,990

The company based its original budget on 2,700 machine-hours. The company actually worked 2,960 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,030 machine-hours. What was the overall fixed overhead budget variance for the month?

3,130 favorable
3,130 unfavorable
340 unfavorable
340 favorable

Solution Summary

Solution contains computation of overall fixed overhead budget variance for the month.

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