Auditory Company, Which Applies Overhead to Production on the Basis

Multiple Choice

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.