A Furniture Manufacturer Has a Standard Costing System Based on Machine

Multiple Choice

A furniture manufacturer has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 3,300 \mathrm{MHs} \\\hline \text { Overhead Costs at the Denominator Activity Level: } & \\\hline \text { Variable Overhead Cost } & \$ 31,845 \\\hline \text { Fixed Overhead Cost } & \$ 40,425 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 3,400 \mathrm{MHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 3,078 \mathrm{MHs} \\\hline \text { Actual Total Variable Overhead Cost } & \$ 32,980 \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 38,975 \\\hline\end{array}$
-What was the fixed overhead budget variance for the period,rounded to the nearest dollar?

A) $1,270 favourable.
B) $1,450 favourable.
C) $2,675 unfavourable.
D) $3,691 favourable.