Auditory Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:

Actual units produced: 11,000

Actual fixed overhead incurred: $743,000

Standard fixed overhead rate: $18 per hour

Budgeted fixed overhead: $720,000

Planned level of machine-hour activity: 40,000

If Auditory estimates four hours to manufacture a completed unit, the company's fixed-overhead budget variance would be:

Multiple Choice

• $23,000 favorable.

• $23,000 unfavorable.

• $72,000 favorable.

• $72,000 unfavorable.

• None of the answers is correct.