Calculate the variable overhead cost variance for hermetic

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Hermetic Systems allocates manufacturing overhead based on machine hours. Each connector should require 13 machine hours. According to the static budget, Hermetic expected to incur the following:

1,300 machine hours per month (100 connectors x 13 machine hours per connector)

$6,500 in variable manufacturing overhead costs

$9450 in fixed manufacturing costs

During August, Hermetic actually used 800 machine hours to make 85 connectors and spent $5,200 in variable manufacturing $8,800 in fixed manufacturing overhead costs. Calculate the variable overhead cost variance for Hermetic.

A. $2,725 Favorable

B. $325 Favorable

C. $1,525 Favorable

D. $1,200 Unfavorable

Reference no: EM131771423

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