Reference no: EM132806764

The following information was taken from the annual manufacturing overhead cost budget of Sheffield Corp.

Variable manufacturing overhead costs $46400

Fixed manufacturing overhead costs $25520

Normal production level in labor hours 23200

Normal production level in units 5800

Standard labor hours per unit 4

Problem 1: During the year, 5625 units were produced, 18440 hours were worked, and the actual manufacturing overhead was $73600. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Sheffield's volume overhead variance is

Option 1: $11200 U.

Option 2: $770 U.

Option 3: $3080 U.

Option 4: $3850 U.