Cannon Company Uses Flexible Budgets

question 195

Multiple Choice

Cannon Company uses flexible budgets. At normal capacity of 8,000 units, budgeted manufacturing overhead is: $48,000 variable and $135,000 fixed. If Cannon had actual overhead costs of $187,500 for 9,000 units produced, what is the difference between actual and budgeted costs?

• A) $1,500 unfavorable
• B) $1,500 favorable
• C) $4,500 unfavorable
• D) $6,000 favorable