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

question 36

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 volume 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:

Units Of X

A measurement term used to quantify an item or commodity in discussion, often used in economics or production.

Units Of Y

This key term typically refers to the measurement of quantity for a variable Y, such as production output or consumption goods.

Milk Shakes

A sweet, cold beverage made from milk, ice cream, and flavorings or sweeteners such as butterscotch, caramel sauce, chocolate syrup, or fruit syrup.

Calories Per Day

The quantity of energy consumed from foods or beverages by an individual in a 24-hour period, measured in calories.