Reference no: EM132587084

Ravena Labs., Inc. makes a single product which has the following standards:

Variable manufacturing overhead is applied on the basis of direct labor hours. The following data are available for October:

1. 3,750 units of compound were produced during the month.
2. There was no beginning direct materials inventory.
3. The ending direct materials inventory was 2,000 ounces.
4. Direct materials purchased: 12,000 ounces for $225,000.
5. Direct labor hours worked: 5,600 hours at a cost of $67,200.
6. Variable manufacturing overhead costs incurred amounted to $18,200.
7. Variable manufacturing overhead applied to products: $18,375.

Question 1: The variable overhead efficiency variance for October is:

Select one:

Option a. $1,400 favorable

Option b. $1,225 unfavorable

Option c. $1,900 unfavorable

Option d. $2,700 favorable