Chong Corporation Recently Prepared a Manufacturing Cost Budget for an Output

Multiple Choice

Chong Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows:

Actual units produced amounted to 60,000. Actual costs incurred were: direct materials, $110,000; direct labor, $60,000; variable overhead, $100,000; and fixed overhead, $97,000. If Chong evaluated performance by the use of a flexible budget, a performance report would reveal a total variance of:

A) $3,000 favorable.
B) $23,000 favorable.
C) $27,000 unfavorable.
D) $42,000 unfavorable.
E) None of the answers is correct.