The following information was taken from the annual manufacturing overhead cost budget of Fergie manufacturing. Variable manufacturing overhead costs $92,000 Fixed Manufacturing overhead costs 55,440 Normal Production level in labor hours 30,800 Normal Production level in units Standard labor hours per unit 5,775 4 During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $151,200. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Fergie's total overhead variance is: a. $1,680 b. $6,160 c. $7,840 d. $22,400

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 4CMA: JoyT Company manufactures Maxi Dolls for sale in toy stores. In planning for this year, JoyT...
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The following information was taken from the annual manufacturing
overhead cost budget of Fergie manufacturing.
Variable manufacturing overhead costs $92,000
Fixed Manufacturing overhead costs 55,440
Normal Production level in labor hours 30,800
Normal Production level in units
Standard labor hours per unit
5,775
4
During the year, 5,600 units were produced, 18,340 hours were worked,
and the actual manufacturing overhead was $151,200. Actual fixed
manufacturing overhead costs equaled budgeted fixed manufacturing
overhead costs. Overhead is applied on the basis of direct labor hours.
Fergie's total overhead variance is:
a. $1,680
b. $6,160
c. $7,840
d. $22,400
Transcribed Image Text:The following information was taken from the annual manufacturing overhead cost budget of Fergie manufacturing. Variable manufacturing overhead costs $92,000 Fixed Manufacturing overhead costs 55,440 Normal Production level in labor hours 30,800 Normal Production level in units Standard labor hours per unit 5,775 4 During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $151,200. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Fergie's total overhead variance is: a. $1,680 b. $6,160 c. $7,840 d. $22,400
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