Benson Company, Which Uses a Standard Cost System, Budgeted $600,000

question 74

Multiple Choice

Benson Company, which uses a standard cost system, budgeted $600,000 of fixed overhead when 40,000 machine hours were anticipated. Other data for the period were:
Actual units produced: 10,000
Standard production time per unit: 3.9 machine hours
Fixed overhead incurred: $620,000
Actual machine hours worked: 42,000
Benson's fixed-overhead budget variance is:

• A) $10,000 favorable.
• B) $15,000 favorable.
• C) $15,000 unfavorable.
• D) $20,000 favorable.
• E) $20,000 unfavorable.

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Definitions:

Identical Medians

The statistical assessment that two or more groups have the same median value in their data distributions.

Identical Probability Distributions

Probability distributions that are exactly the same in terms of their statistical properties such as mean, variance, and skewness.

Single Population

Refers to a group or set of entities sharing one or more characteristics, from which data can be collected and analyzed as a unified whole.

Sign Test

A nonparametric test used to determine if there is a significant difference between paired observations.