FrontGrade Systems allocates manufacturing over- head based on machine hours. Each connector should require 11 machine hours. According to the static budget, FrontGrade expected to incur the following:

1,100 machine hours per month (100 connectors x 11 machine hours per connector)

$5,500 in variable manufacturing overhead costs

$8,250 in fixed manufacturing overhead costs

During August, FrontGrade actually used 1,000 machine hours to make 110 connectors and spent $5,600 in variable manufacturing costs and $8,300 in fixed manufacturing over- head costs.

1. Front Grade