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Platko Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in

Platko Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the companys only product is as follows:

Inputs Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 3.6 gallons $7.00 /gallon $25.20
Direct labor 0.80 hours $22.00 /hour 17.60
Fixed manufacturing overhead 0.80 hours $14.50 /hour 11.60
Total standard cost per unit $ 54.40

The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $348,000 and budgeted activity of 24,000 hours. During the year, 38,900 units were started and completed. Actual fixed overhead costs for the year were $335,900.

Assume that all transactions are recorded on a worksheet as shown in the text. On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and PP&E (net). All of the variance columns are on the right-hand side of the equals sign along with the column for Retained Earnings.

When the fixed manufacturing overhead cost is recorded, which of the following entries will be made?

Multiple Choice:

A $12,100 in the FOH Volume Variance column

B ($12,100) in the FOH Volume Variance column

C $12,100 in the FOH Budget Variance column

D ($12,100) in the FOH Budget Variance column

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