Reference no: EM132527634

A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

Denominator level of activity 7,300DLHs

Overhead costs at the denominator activity level:

Variable overhead cost $40,150

Fixed overhead cost       $80,300

The following data pertain to operations for the most recent period:

Actual hours                                                    7,500 DLHs

Standard hours allowed for the actual output       7,154 DLHs

Actual total variable manufacturing overhead cost $43,800

Actual total fixed manufacturing overhead cost     $79,280

Question 1: The fixed manufacturing overhead budget variance for the period is closest to:

Option A. $1,020 F

Option B. $586 F

Option C. $3,650 F

Option D. $3,806 U