Hoag Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below: Original Budget Actual Costs Fixed overhead costs: Supervision $ 9,880 $ 9,970 Utilities 4,160 4,440 Factory depreciation 21,320 21,190 Total fixed manufacturing overhead cost $ 35,360 $ 35,600 The company based its original budget on 2,600 machine-hours. The company actually worked 2,280 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 2,080 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month

Respuesta :

Answer: $7,072 Unfavorable

Explanation:

Find fixed manufacturing overhead rate:

= Total budgeted fixed manufacturing overhead cost / Budgeted machine hours

= 35,360 / 2,600

= $13.60

Variance Favorable (Unfavorable) = (Standard hours allowed  - Budgeted machine hours) * fixed manufacturing overhead rate

= (2,080 - 2,600) * 13.60

= -$7,072