Steinhagen Corporation Applies Manufacturing Overhead to Products on the Basis

question 42

Multiple Choice

Steinhagen 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 2,600 machine-hours. The company actually worked 2,790 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 2,960 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

• A)$5,148 Favorable
• B)$5,148 Unfavorable
• C)$2,717 Favorable
• D)$2,717 Unfavorable

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Definitions:

Overdue Accounts

Accounts receivable that have not been paid by the due date, indicating delayed payments from customers.

Lock Box

A banking service provided to companies for the collection of payments from customers, where the payments are sent directly to a post office box, then quickly processed by the bank.

Mail Float

The time delay between when a check is written and mailed, and when the recipient actually receives and processes the payment.

Processing Float

The time difference between when a payment is made and the funds are actually available in the payee's account.