Potestio Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted (Planned) Overhead: Budgeted variable manufacturing overhead$49,530 Budgeted fixed manufacturing overhead 252,720 Total budgeted manufacturing overhead$302,250 Budgeted production (a) 30,000units Standard hours per unit (b) 1.30machine-hours Budgeted hours (a) × (b) 39,000machine-hours Applying Overhead: Actual production (a) 31,000units Standard hours per unit (b) 1.30machine-hours Standard hours allowed for
the actual production (a) × (b) 40,300machine-hours Actual Overhead and Hours: Actual variable manufacturing overhead$80,560 Actual fixed manufacturing overhead 266,720 Total actual manufacturing overhead$347,280 Actual hours 42,400machine-hours ?The total of the overhead variances is:
A. $45,030 F
B. $34,955 F
C. $45,030 U
D. $34,955 U
Answer: D
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