The Management of Lorraine Enterprises Is Analyzing Fixed Manufacturing Overhead

Multiple Choice

The management of Lorraine Enterprises is analyzing fixed manufacturing overhead variances for the fiscal period just ended. It notices that the total fixed manufacturing overhead variance was $360,000 Unfavorable and that the fixed overhead budget variance was $140,000 Favorable. However, Lorraine's accountants had failed to calculate the fixed overhead volume variance. The standard fixed overhead rate was $20 per machine hour and Lorraine had allowed for 18,000 machine hours.
What is the amount of Lorraine's budgeted cost for fixed manufacturing overhead?

A) $180,000
B) $860,000
C) $430,000
D) $340,000