Channel One Industries Uses a Standard Costing System to Apply

Multiple Choice

Channel One Industries uses a standard costing system to apply manufacturing costs to its production process. In May, Channel One anticipated producing 2,450 units with fixed manufacturing overhead costs allocated at $7.40 per direct labor hour with a standard of 1.5 direct labor hours per unit. In May, actual production was 3,200 units and actual fixed manufacturing overhead costs were $23,000. What was Channel One's fixed manufacturing overhead budget variance for May?

A) $4,195 favorable
B) $4,195 unfavorable
C) $8,325 favorable
D) $8,325 unfavorable