Answer the Following Question(s)using the Information Below

Multiple Choice

Answer the following question(s) using the information below.Munoz Inc.produces a special line of plastic toy racing cars in batches.To manufacture a batch of the cars Munoz Inc.must setup the machines and molds.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and molds for different styles of car.Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours.The following information pertains to June 2012:

-Calculate the rate variance for fixed setup overhead costs.

A) $1,600 unfavourable
B) $400 unfavourable
C) $600 unfavourable
D) $400 favourable
E) $600 favourable