Final answer:
The fixed-overhead budget variance for Benson Company is the difference between the standard fixed overhead cost allocated for actual production and the actual fixed overhead incurred. After calculating this variance, it is found to be $35,000 unfavorable, but this does not match any of the multiple choice answers provided.
Step-by-step explanation:
The student is asking about the calculation of the fixed-overhead budget variance for the Benson Company. This variance measures the difference between what a company budgeted for fixed overhead costs and what it actually incurred. To calculate this variance, we start by finding the standard fixed overhead cost allotted for the actual output.
The standard fixed overhead cost rate can be calculated by dividing the budgeted fixed overhead by the anticipated machine hours:
Budgeted fixed overhead = $600,000
Anticipated machine hours = 40,000
Standard fixed overhead cost rate = Budgeted fixed overhead / Anticipated machine hours
Standard fixed overhead cost rate = $600,000 / 40,000
Standard fixed overhead cost rate = $15 per machine hour
Now, we determine the standard fixed overhead costs allocated for the actual production by multiplying this rate by the standard hours allowed for actual production:
Actual units produced = 10,000
Standard production time per unit = 3.9 machine hours
Standard hours allowed for actual production = Actual units produced * Standard production time per unit
Standard hours allowed for actual production = 10,000 units * 3.9 machine hours/unit
Standard hours allowed for actual production = 39,000 machine hours
Standard fixed overhead cost allocated = Standard fixed overhead cost rate * Standard hours allowed for actual production
Standard fixed overhead cost allocated = $15/machine hour * 39,000 machine hours
Standard fixed overhead cost allocated = $585,000
The fixed-overhead budget variance is then the difference between the standard fixed overhead cost allocated and the actual fixed overhead incurred:
Actual fixed overhead incurred = $620,000
Fixed-overhead budget variance = Standard fixed overhead cost allocated - Actual fixed overhead incurred
Fixed-overhead budget variance = $585,000 - $620,000
Fixed-overhead budget variance = -$35,000
Therefore, the fixed-overhead budget variance is $35,000 unfavorable, which means the actual fixed overhead was higher than the budgeted amount. However, this does not match any of the options provided in the multiple choice question, indicating there may be an error in the provided options or the assumption made here.