Mclellan Corporation Applies Manufacturing Overhead to Products on the Basis

question 14

Multiple Choice

Mclellan Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the month appear below: The company based its original budget on 6,100 machine-hours. The company actually worked 6,480 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,370 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

• A) $500 Favorable
• B) $500 Unfavorable
• C) $1,570 Favorable
• D) $1,570 Unfavorable

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Definitions:

Promissory Note

A monetary tool involving a formal commitment from one party to compensate another party with a specific amount of money, either upon request or at an agreed future time.

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Interest reckoned only on the initial capital, disregarding compounded sums.

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The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.

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