The Phelps Company Applies Overhead Costs to Products on the Basis

Multiple Choice

The Phelps Company applies overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. Phelps Company had the following budgeted and actual data for March: The budgeted direct labor-hours is used as the denominator activity for the month.
-The fixed manufacturing overhead budget variance for March is:

A) $2,000 favorable
B) $500 favorable
C) $2,000 unfavorable
D) $2,500 favorable