Megan, Inc

question 127

Multiple Choice

Megan, Inc. uses the following standard costs per unit for one of its products: Direct labor (2.0 hrs. @ $5.00/hr.) = $10.00; overhead (2.0 hrs. @ $2.50/hr.) = $5.00. The flexible budget for overhead is $120,000 plus $1.00 per direct labor hour (DLH) . Actual data for the past month show total overhead costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units produced.

The fixed overhead spending variance for Megan, Inc. for the past month, to the nearest whole dollar, was:

• A) $0.
• B) $3,000 unfavorable.
• C) $5,000 unfavorable.
• D) $17,000 unfavorable.
• E) $25,000 unfavorable.

---

Definitions:

Deed Of Trust

A formal written instrument that transfers legal ownership of real property to a third party while the mortgagor remains on the property. The third party holds certain rights to that property as security for the mortgagor’s creditors.

Disinterested Third Party

A disinterested third party is an unbiased individual or entity that is not involved in the matters at hand, ensuring impartiality in decision-making processes or disputes.

One Percent

Often refers to the segment of the population that holds a disproportionately large share of wealth and economic power.

Security Interest

A legal right or claim on assets granted to a creditor to secure the repayment of a debt or obligation.