Denominator activity for fixed manufacturing overhead

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Teana Corporation uses machine hours as its denominator activity for fixed manufacturing overhead. For the most recent year, the company showed the following data:

At the beginning of the year :

Budgeted Machine Hours (denominator level) : 600,000 Machine Hours

At the end of the year:

Actual Fixed Manufacturing Overhead : $260,000

Fixed Manufacturing Overhead Budget Variance : $20,000 Favorable

Fixed Manufacturing Overhead Volume Variance : $15,000 Favorable

Question : Teana's standard machine hours allowed for actual output was closest to ?

 

A) 562,500 Machine Hours B) 632,143 Machine Hours C) 637,500 Machine Hours D) 567,857 Machine Hours E) None

Reference no: EM13746314

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