Martin Company, Which Applies Overhead to Production on the Basis

question 57

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) None of the other answers are correct.

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Definitions:

Osteoarthritis

A degenerative joint disease characterized by the breakdown of joint cartilage and underlying bone, leading to pain and stiffness.

Atherosclerosis

A condition characterized by the hardening and narrowing of the arteries due to the build-up of plaque, leading to potential heart disease.

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A group of progressive lung diseases that obstruct airflow and make it difficult to breathe.

Presbyopia

A condition associated with aging in which the eyes gradually lose the ability to focus on close objects.