majestic corporation manufactures wheelbarrows and uses budgeted machine hours to allocate variable manufacturing overhead. the following information relates to the company's manufacturing overhead data: budgeted output units 43,500 units budgeted machine-hours 17,400 hours budgeted variable manufacturing overhead costs for 43,500 units $382,800 actual output units produced 45,500 units actual machine-hours used 14,500 hours actual variable manufacturing overhead costs $435,709 what is the flexible-budget variance for variable manufacturing overhead?

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anthougo anthougo · Answer 1 · 2022-10-18T18:50:07+02:00

The flexible-budget variance for variable manufacturing overhead is $116,709 Unfavorable.

The flexible budget variances are the differences between the actual results and the flexible budget results.

The flexible budget considers different production and sales levels, unlike the fixed budget model.

In this situation, the basis for allocating the variable manufacturing overhead is the budgeted machine hours and not the units produced.

Budgeted output = 43,500 units

Budgeted machine-hours = 17,400 hours

Budgeted variable manufacturing overhead costs = $382,800

Budgeted overhead cost per machine hour = $22 ($382,800/17,400)

Actual output = 45,500 units

Actual machine-hours used = 14,500 hours

Actual variable manufacturing overhead costs = $435,709

Flexible variable manufacturing overhead costs = $319,000 ($22 x 14,500)

Flexible-budget variance for variable manufacturing overhead = $116,709 U ($319,000 - $435,709).

Thus, Majestic Corporation incurred more variable manufacturing overhead than it should have under the flexible-budget model.

Learn more about the flexible budget model at https://brainly.com/question/15999424

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