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Vivaldi Enterprises uses a standard cost system in which it applies manufacturing overhead to units of product on the ba...

Vivaldi Enterprises uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours. During the month of September, the company applied $51,000 in fixed manufacturing overhead cost to units of product. At the end of the month, manufacturing overhead was overapplied by $3,000.

If the volume variance in September was $2,000 favorable, then the budgeted fixed manufacturing overhead cost for the month was:

A. $48,000

B. $49,000

C. $54,000

D. $53,000

E. None of the above

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Answer #1

Ans: (B) $ 49000

Fixed Overhead Volume Variance:

= Applied Fixed Overhead - Budgeted Fixed Overhead

= 2000.F = $51000- Budgeted Fixed Overhead

Therefore,

Budgeted Fixed overhead = $51000- $2000

Budgeted Fixed Overhead = $ 49000

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