When Walston Corporation Prepared Its Budget for 2014, It Estimated

question 16

Multiple Choice

When Walston Corporation prepared its budget for 2014, it estimated fixed overhead of $540,000 ($45,000 per month) and variable overhead at $3.00 per unit produced. The company planned to produce 48,000 units during the year at a rate of 4,000 units each month. During April, the company produced 3,800 units and total overhead costs were $59,000. How much is the controllable overhead variance for April?

• A) $2,000 unfavorable
• B) $2,600 unfavorable
• C) $600 favorable
• D) $2,250 unfavorable

---

Definitions:

Game The System

Utilizing the rules and guidelines of a system in a way that manipulates or exploits loopholes for personal benefit.

Agency Costs

Costs that arise from conflicts of interest between principals (owners) and agents (managers), including monitoring and incentive expenses.

Background Checks

The process of verifying the personal, financial, and criminal history of an individual, commonly undertaken by employers.

Time Clocks

Devices used to track the hours worked by employees, often by punching a card or logging in digitally.