Answer the Following Questions Using the Information Below

Multiple Choice

Answer the following questions using the information below:

Munoz, Inc., produces a special line of plastic toy racing cars. Munoz, Inc., produces the cars in batches. To manufacture a batch of the cars, Munoz, Inc., must set up 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 2015:

-Calculate the flexible-budget variance for variable overhead setup costs.

A) $600 favorable
B) $1,300 favorable
C) $600 unfavorable
D) $1,300 unfavorable