Songster Corporation Applies Manufacturing Overhead to Products on the Basis

question 160

Multiple Choice

Songster Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: The company based its original budget on 3,500 machine-hours. The company actually worked 3,700 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,820 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

• A) $2,432 Favorable
• B) $2,432 Unfavorable
• C) $420 Favorable
• D) $420 Unfavorable

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Definitions:

Founder Effect

A form of genetic drift that occurs when a new population is established by a very small number of individuals from a larger population, leading to reduced genetic variation.

Genetic Drift

A mechanism of evolution that causes changes in allele frequencies in a population due to random sampling effects, particularly in small populations.

Bureaucracy

A rational and efficient form of organisation founded on logic, order and legitimate authority.

Division of Labour

The practice of dividing work into distinct tasks or roles, specialized by individuals or groups, to increase efficiency and productivity.