Martin Company,which Applies Overhead to Production on the Basis of Machine

question 9

Multiple Choice

Martin Company,which applies overhead to production on the basis of machine hours,reported the following data for the period just ended:
Actual units produced: 9,000
Actual variable overhead incurred: $54,400
Actual machine hours worked: 16,000
Standard variable overhead cost per machine hour: $3.50
If Martin estimates two hours to manufacture a completed unit,the company's variable-overhead efficiency variance is:

• A)$1,600 favorable.
• B)$1,600 unfavorable.
• C)$7,000 favorable.
• D)$7,000 unfavorable.
• E)some other amount not listed abovE.

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Definitions:

Tax Law

The body of laws and regulations governing the administration of taxes, including levies on income, property, transactions, and estates.

Fiscal Year-End

Fiscal Year-End is the conclusion of a 12-month accounting period for a business or organization, used for financial reporting and tax purposes.

Automatic Extension

A granted period beyond the original due date for filing tax returns without needing to explain the reason for the delay.

FMV

Fair Market Value, the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.