Deck 11: Flexible Budgeting and Analysis of Overhead Costs

Question 1

Flexible budgets reflect a company's anticipated costs based on variations in activity levels.

Answer 1

True

Question 2

A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed manufacturing overhead of $120,000.The budget for 25,000 hours would reveal total overhead costs of $210,000.

Answer 2

False

Question 3

The units of output are meaningful measures in multiproduct firms.

Answer 3

False

Question 4

In a standard-costing system, the standard costs are used for product costing as well as for cost control.

Question 5

The budget variance arises from a comparison of actual variable overhead expenditures with budgeted variable overhead costs.

Question 6

The formula flexible budget is more general than the columnar flexible budget, because the formula allows managers to compute budgeted overhead costs at any activity level.

Question 7

In an activity-based flexible budget, each overhead item has the same cost driver, identified by flexible overhead budget for that cost item.

Question 8

The sales-volume variance measures the effect on sales revenue of sales price deviations.

Question 9

Both normal- and standard-costing systems use a predetermined overhead rate.

Question 10

The overhead cost performance report presents itemized variances along with actual and budgeted costs for each overhead item.

Question 11

From a traditional perspective, dollars of raw material have been a popular activity measure in manufacturing firms.

Question 12

The manufacturing overhead applied to Work-in-Process Inventory by a company that uses standard costing would be computed as actual hours times a predetermined (standard) overhead rate.

Question 13

The sales-price variance is the difference between the actual and budgeted sales prices multiplied by the actual sales volume.

Question 14

Flexible budgets reflect a company's anticipated costs based on variations in:

A)activity levels.
B)inflation rates.
C)managers.
D)anticipated capital acquisitions.
E)standards.

Question 15

The advantage of dollar measures as a basis for flexible overhead budgeting is that they are relatively stable overtime.

Question 16

The overhead cost performance report includes spending and efficiency variances for both variable and fixed items.

Question 17

The right (credit) side of the production-overhead account accumulates actual overhead costs incurred.

Question 18

A static budget:

A)is based totally on prior year's costs.
B)is based on one anticipated activity level.
C)is based on a range of activity.
D)is preferred over a flexible budget in the evaluation of performance.
E)presents a clear measure of performance when planned activity differs from actual activity.

Question 19

Efficient or inefficient use of a specific component of variable overhead (e.g., electricity) will cause the firm to have a variable-overhead efficiency variance.

Question 20

The activity-based flexible budget provides a more accurate benchmark against which to compare actual costs than does a conventional flexible budget.

Question 21

Panama Co.prepared the following flexible overhead budget where PH is process hour.Which of the answers provided correctly completes the table?

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 22

Chong Corporation recently prepared a flexible budget for water usage at its manufacturing plant.Budgeted water cost at various projected production levels is as follows: Actual units produced amounted to 60,000.Actual cost incurred for water usage was $4,500.What was Chong's cost variance for water?

A)$300 favorable.
B)$500 unfavorable.
C)$1,500 favorable.
D)$2,700 favorable.
E)None of the answers is correct.

Question 23

A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed manufacturing overhead of $120,000.The budget for 25,000 hours would reveal total overhead costs of:

A)$210,000.
B)$270,000.
C)$290,000.
D)$350,000.
E)None of the answers is correct.

Question 24

A flexible budget:

A)parallels a static budget with respect to format and advantages of use.
B)is preferred over a static budget in the evaluation of performance.
C)gives management flexibility in terms of meeting budget goals.
D)can be used to compare actual and budgeted costs at various levels of activity.
E)is both preferred over a static budget in the evaluation of performance and can be used to compare

Question 25

The activity measure selected for use in a variable- and fixed-overhead flexible budget:

A)should be stated in sales dollars.
B)should be approved by the company's president.
C)should vary in a similar behavior pattern to the way that variable overhead varies.
D)should remain fixed.
E)should produce the most attractive results for the individual who will use the budget in managerial

Question 26

Dealer Enterprises (DE) anticipated that 84,000 process hours would be worked during an upcoming accounting period when, in fact, 92,000 hours were actually worked.One of the company's cost functions is expressed as follows: Y = $16PH + $640,000 where PH is defined as process hours What budgeted dollar amount would appear in DE's static budget and flexible budget for the preceding cost function?

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 27

Nerve Pain Innovations anticipated that 84,000 process hours would be worked during an upcoming accounting period when, in fact, 90,000 hours were actually worked.One of the company's cost functions is expressed as follows: Y = $16PH + $640,000 where PH is defined as process hours What is Nerve Pain's flexible budget (Y) for the preceding cost function?

A)$1,280,000
B)$2,080,000
C)$1,984,000
D)$1,221,000
E)$2,112,000

Question 28

With respect to overhead, what is the difference between normal costing and standard costing?

A)Use of a predetermined overhead rate.
B)Use of standard hours versus actual hours.
C)Use of a standard rate versus an actual rate.
D)The choice of an activity measure.
E)There is no difference.

Question 29

Seven Falls Cuisines has the following flexible-budget formula: Y = $13PH + $450,000 where PH is defined as process hours. What is Seven Falls' budgeted total cost if its process hours equal 25,000?

A)$325,000.
B)$450,000.
C)$775,000.
D)$1,225,000.
E)Answer cannot be determined from the information provided.

Question 30

The manufacturing overhead applied to Work-in-Process Inventory by a company that uses standard costing would be computed as:

A)actual hours times a predetermined (standard) overhead rate.
B)standard hours times a predetermined (standard) overhead rate.
C)actual hours times an actual overhead rate.
D)standard hours times an actual overhead rate.
E)$0, because users of standard costing do not apply overhead to work in process.

Question 31

Which of the following statements is/are correct concerning the application of overhead in a standard costing system driven by process hours?

A)A predetermined overhead rate is allowed only for fixed overhead.
B)Overhead application is based on standard process hours allowed.
C)Overhead application is based on actual process hours incurred.
D)Only prime costs are considered to be product costs in a standard costing system.
E)Only variable overhead costs are applied to production.

Question 32

Barrington Industries anticipated selling 29,000 units of a major product and paying sales commissions of $6 per unit.Actual sales and sales commissions totaled 31,500 units and $182,700, respectively.If the company used a static budget for performance evaluations, Barrington would report a cost variance of:

A)$6,300U.
B)$6,300F.
C)$8,700U.
D)$8,700F.
E)None of the answers is correct.

Question 33

Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours.The company's flexible budget revealed the following: Commerce's flexible-budget formula, where Y is defined as total cost and AH represents activity hours, is:

A)Y = $4.50AH + $24AH.
B)Y = $4.50AH + $720,000.
C)Y = $22.50AH.
D)Y = $180,000 + $18AH.
E)Y = $945,000.

Question 34

Seven Falls Cuisines has the following flexible-budget formula: Y = $13PH + $450,000 where PH is defined as process hours. Which of the following statements is (are) true?

A)Seven Falls has $450,000 of fixed costs.
B)Each additional hour of process time is expected to cost Seven Falls $13.
C)Y would equal the amount shown as "total cost" in the company's flexible budget.
D)Seven Falls has $450,000 of fixed costs and each additional hour of process time is expected to cost
E)All of the answers are correct.

Question 35

Which of the following mathematical expressions is found in a typical flexible-budget formula for overhead?

A)Total activity units + budgeted fixed overhead cost per unit.
B)Budgeted variable overhead cost per unit + budgeted fixed overhead cost.
C)(Budgeted variable overhead cost per unit × total activity units) + budgeted fixed overhead costs.
D)(Budgeted fixed overhead cost per unit × total activity units) + (budgeted variable overhead cost per unit ×
E)None of the answers is correct.

Question 36

Strongheart Enterprises anticipated selling 27,000 units of a major product and paying sales commissions of $6 per unit.Actual sales and sales commissions totaled 27,500 units and $171,400, respectively.If the company used a flexible budget for performance evaluations, Strongheart would report a cost variance of:

A)$6,400U.
B)$6,400F.
C)$9,400U.
D)$9,400F.
E)None of the answers is correct.

Question 37

Zhou, Inc.is planning its overhead costs for an upcoming period when 85,000 machine hours are expected to be worked.Activity may drop as low as 78,000 hours if some overdue equipment maintenance procedures are performed; on the other hand, activity could jump to 94,000 hours if one of Zhou's major competitors likely goes bankrupt.A flexible overhead budget would best be based on:

A)78,000 hours.
B)85,000 hours.
C)94,000 hours.
D)78,000 hours and 94,000 hours.
E)78,000 hours, 85,000 hours, and 94,000 hours.

Question 38

A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed manufacturing overhead of $120,000.The budget for 20,000 hours would reveal total overhead costs of:

A)$240,000.
B)$270,000.
C)$290,000.
D)$350,000.
E)$210,000.

Question 39

Award: 1.00 point

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 40

Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours.The company's flexible budget revealed the following: If Commerce operated at 35,000 hours, its total budgeted cost would be:

A)$877,500.
B)$945,000.
C)$787,500.
D)$997,500.
E)$810,000.

Question 41

Bannister Motors Corporation reported the following variances for the period just ended: If Bannister desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:

A)$50,000U.
B)$70,000U.
C)$120,000U.
D)$178,000U.
E)None of the answers is correct.

Question 42

Assume that machine hours drive the cost for overhead.The difference between the actual variable overhead incurred and the applied variable overhead is the:

A)volume variance.
B)production variance.
C)efficiency variance.
D)sum of the spending and efficiency variances.
E)spending variance.

Question 43

Which of the following is used in the computation of the fixed overhead budget variance?

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 44

A fixed-overhead volume variance would normally arise when:

A)actual hours of activity coincide with actual units of production.
B)budgeted fixed overhead is less than (or greater than) applied fixed overhead.
C)there is a fixed-overhead budget variance.
D)actual fixed overhead exceeds budgeted fixed overhead.
E)there is a variable-overhead efficiency variance.

Question 45

Which of the following is used in the computation of the variable-overhead spending variance?

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 46

Which of the following variances would be useful to help control overhead spending?

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 47

Which of the following elements is (are) needed in a straightforward calculation of the variable-overhead spending variance?

A)Variable overhead incurred during the period.
B)Budgeted variable overhead based on actual hours worked.
C)Standard variable overhead applied to production.
D)Both variable overhead incurred during the period and budgeted variable overhead based on actual
E)Both variable overhead incurred during the period and standard variable overhead applied to production.

Question 48

Priority 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 Priority 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 answers is correct.

Question 49

Canister Industries uses labor hours to apply variable overhead to production.If the company's workers were very inefficient during the period, which of the following statements would be true about the variable-overhead efficiency variance?

A)The variance would be favorable.
B)The variance would be unfavorable.
C)The nature of the variance (favorable or unfavorable) would be unknown based on the facts presented.
D)The variance would be the same amount as the labor efficiency variance.
E)None of the answers is correct.

Question 50

Orlando Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 12,000 Actual variable overhead incurred: $77,700 Actual machine hours worked: 18,800 Standard variable overhead cost per machine hour: $4.50 If Orlando estimates 1.5 hours to manufacture a completed unit, the company's variable-overhead spending variance is:

A)$3,600 favorable.
B)$3,600 unfavorable.
C)$6,900 favorable.
D)$6,900 unfavorable.
E)None of the answers is correct.

Question 51

Which of the following is not an overhead variance?

A)Variable-overhead spending variance.
B)Variable-overhead volume variance.
C)Variable-overhead efficiency variance.
D)Fixed-overhead budget variance.
E)Fixed-overhead volume variance.

Question 52

Which of the following is not an overhead variance?

A)Variable-overhead spending variance.
B)Variable-overhead efficiency variance.
C)Fixed-overhead efficiency variance.
D)Fixed-overhead budget variance.
E)Fixed-overhead volume variance.

Question 53

Which variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity?

A)The variable-overhead spending variance.
B)The variable-overhead efficiency variance.
C)The fixed-overhead budget variance.
D)The fixed-overhead volume variance.
E)The total fixed-overhead variance.

Question 54

Bannister Motors Corporation reported the following variances for the period just ended: Variable-overhead spending variance: $50,000U Variable-overhead efficiency variance: $28,000U Fixed-overhead budget variance: $70,000U Fixed-overhead volume variance: $30,000U If Bannister prepared an overhead cost performance report, which of these overhead variances is likely to be excluded from the report?

A)Variable-overhead spending variance.
B)Variable-overhead efficiency variance.
C)Fixed-overhead budget variance.
D)Fixed-overhead volume variance.
E)None of the variances would be excluded.

Question 55

Which of the following should have the strongest cause and effect relationship with overhead costs?

A)Cost followers.
B)Non-value-added costs.
C)Cost drivers.
D)Units of output.
E)Value-added costs.

Question 56

What will cause the variable-overhead efficiency variance?

A)Efficient or inefficient use of a specific component of variable overhead (e.g., electricity).
B)Full or partial utilization of major equipment resources.
C)Production of units in excess of the number of units sold.
D)Efficient or inefficient use of the cost driver (e.g., machine hours) for variable overhead.
E)Changes in the salary cost of manufacturing supervisors.

Question 57

The difference between the total actual factory overhead and the total factory overhead applied to production is the:

A)sum of the spending, efficiency, budget, and volume variances.
B)controllable variance.
C)efficiency variance.
D)spending variance.
E)volume variance.

Question 58

The difference between budgeted fixed manufacturing overhead and the fixed overhead applied to production is the:

A)sum of the spending and efficiency variances.
B)controllable variance.
C)efficiency variance.
D)spending variance.
E)volume variance.

Question 59

Admac Technologies has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours.The company's static budget was based on 46,000 units.Actual results for the year follow. Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 Admac's variable-overhead spending variance is:

A)$20,000 favorable.
B)$20,000 unfavorable.
C)$27,000 favorable.
D)$27,000 unfavorable.
E)None of the answers is correct.

Question 60

The budget variance arises from a comparison of:

A)budgeted fixed overhead expenditures with budgeted fixed overhead costs.
B)actual fixed overhead costs with budgeted fixed overhead costs.
C)actual variable overhead expenditures with budgeted variable overhead costs.
D)variable overhead costs with budgeted fixed overhead costs.
E)static-budget amounts with flexible-budget amounts.

Question 61

Campaign Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 12,000 Actual fixed overhead incurred: $730,000 Actual machine hours worked: 60,000 Budgeted fixed overhead: $720,000 Planned level of machine-hour activity: 50,000 If Campaign estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be:

A)$12.00.
B)$14.40.
C)$14.60.
D)$15.00.
E)None of the answers is correct.

Question 62

Institute Technologies is choosing new cost drivers for its accounting system.One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs.Data for the past year follow.

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 63

Approach 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 Approach estimates four hours to manufacture a completed unit, the company's fixed-overhead volume variance would be:

A)$10,400 negative.
B)$10,400 positive.
C)$11,000 negative.
D)$11,000 positive.
E)None of the answers is correct.

Question 64

Match Point, Inc.has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production.Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 Match Point's fixed-overhead volume variance is:

A)$4,000 negative.
B)$4,000 positive.
C)$10,000 negative.
D)$10,000 positive.
E)None of the answers is correct.

Question 65

Auditory Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 13,000 Actual fixed overhead incurred: $742,000 Standard fixed overhead rate: $15 per hour Budgeted fixed overhead: $720,000 Planned level of machine-hour activity: 48,000 If Auditory estimates four hours to manufacture a completed unit, the company's fixed-overhead budget variance would be:

A)$22,000 favorable.
B)$22,000 unfavorable.
C)$60,000 favorable.
D)$60,000 unfavorable.
E)None of the answers is correct.

Question 66

Messenger, Inc.has a standard variable overhead rate of $5 per machine hour, with each completed unit expected to take three machine hours to produce.A review of the company's accounting records found the following: Actual production: 19,500 units Variable-overhead efficiency variance: $9,000U Variable-overhead spending variance: $21,000F What was Messenger's actual variable overhead during the period?

A)$262,500.
B)$280,500.
C)$304,500.
D)$322,500.
E)None of the answers is correct.

Question 67

Hope, Inc.has a standard variable overhead rate of $4 per machine hour, with each completed unit expected to take three machine hours to produce.A review of the company's accounting records found the following: How many units did Hope actually produce during the period?

A)13,500.
B)16,500.
C)18,500.
D)21,500.
E)None of the answers is correct.

Question 68

Sigmo Company, which uses a standard cost system, budgeted $800,000 of fixed overhead when 50,000 machine hours were anticipated.Other data for the period were: Sigmo's variable-overhead efficiency variance is:

A)$10,200U.
B)$10,200F.
C)$15,300U.
D)$15,300F.
E)None of the answers is correct.

Question 69

Admac Technologies has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours.The company's static budget was based on 46,000 units.Actual results for the year follow. Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 Admac's variable-overhead efficiency variance is:

A)$20,000 favorable.
B)$20,000 unfavorable.
C)$27,000 favorable.
D)$27,000 unfavorable.
E)None of the answers is correct.

Question 70

Forward Venture 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 Forward Venture Company'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.

Question 71

Solution Enterprises incurred $828,000 of fixed overhead during the period.During that same period, the company applied $845,000 of fixed overhead to production and reported an unfavorable budget variance of $41,000.How much was Solution's budgeted fixed overhead?

A)$787,000.
B)$804,000.
C)$869,000.
D)$886,000.
E)Not enough information to judge.

Question 72

Institute Technologies is choosing new cost drivers for its accounting system.One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs.Data for the past year follow. Assume that both cost pools for Institute are combined into a single pool, and labor hours is the driver.The total flexible budget for the actual level of labor hours and the total variance for the combined pool are:

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 73

Match Point, Inc.has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production.Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 The amount of variable overhead that Match Point applied to production is:

A)$158,400.
B)$160,000.
C)$163,200.
D)$167,750.
E)None of the answers is correct.

Question 74

Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000.Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 The standard variable overhead rate for May is:

A)$2.00.
B)$2.08.
C)$3.00.
D)$5.00.
E)$5.21.

Question 75

Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000.Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 The fixed-overhead budget and volume variances for Theory are:

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 76

Sigmo Company, which uses a standard cost system, budgeted $800,000 of fixed overhead when 50,000 machine hours were anticipated.Other data for the period were: Actual units produced: 10,600 Actual machine hours worked: 51,800 Actual variable overhead incurred: $475,000 Actual fixed overhead incurred: $790,100 Standard variable overhead rate per machine hour: $8.50 Standard production time per unit: 5 hours Sigmo's fixed-overhead budget variance is:

A)$9,900U.
B)$9,900F.
C)$28,800U.
D)$28,800F.
E)None of the answers is correct.

Question 77

Match Point, Inc.has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production.Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 Match Point's variable-overhead spending variance is:

A)$550 favorable.
B)$4,550 unfavorable.
C)$4,800 favorable.
D)$9,350 unfavorable.
E)None of the answers is correct.

Question 78

Forward Venture 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 Forward Venture Company's fixed-overhead volume variance is:

A)$10,000 negative.
B)$15,000 negative.
C)$15,000 positive.
D)$20,000 negative.
E)$20,000 positive.

Question 79

Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000.Actual data for May were: The variable-overhead spending and efficiency variances for Theory are:

A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question 80

Match Point, Inc.has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production.Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 Match Point's fixed-overhead budget variance is:

A)$6,000 unfavorable.
B)$7,000 unfavorable.
C)$10,000 unfavorable.
D)$12,000 unfavorable.
E)None of the answers is correct.