Enberg Company, Which Applies Overhead to Production on the Basis

question 4

Multiple Choice

Enberg Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 14,800
Actual fixed overhead incurred: $791,000
Standard fixed overhead rate: $13 per hour
Budgeted fixed overhead: $780,000
Planned level of machine-hour activity: 60,000
If Enberg estimates four hours to manufacture a completed unit, the company's fixed-overhead volume variance would be:

• A) $10,400 favorable.
• B) $10,400 unfavorable.
• C) $11,000 favorable.
• D) $11,000 unfavorable.
• E) None of the other answers are correct.