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Problem - Randy's Production Company uses a single cost pool for fixed manufacturing overhead and applies manufacturing overhead based on machine hours. The amount for May 2020 was budgeted at $355,000; however, the actual amount was $348,000. Actual production for May was 16,900 units, and actual machine hours were 14,300. Budgeted production included 17,750 units and 14,200 machine hours.
Required -
a. What is the balance in the manufacturing overhead at the end of the period (before adjusting entries)?
b. How much of this variance due to spending more (or less) on fixed overhead?
c. How much of this variance was due to producing more (or less) units.
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