An Outdoor Barbecue Grill Manufacturer Has a Standard Costing System

An outdoor barbecue grill manufacturer has a standard costing system based on direct labour hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 3,300 \text { DLHs } \\\hline \text { Fixed Overhead Cost } & \$ 26,895 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 3,400 \mathrm{DLHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 3,420 \mathrm{DLHs} \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 28,295 \\\hline\end{array}$
-What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

A) $166 unfavourable.
B) $422 favourable.
C) $585 favourable.
D) $1,400 unfavourable.

Correct Answer:

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