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Problem 1: Nuts and Bolts, Ltd. has normal budgeted overhead costs of $235,520 and a normal capacity of 92,000 direct labor hours for the third quarter, which are evenly distributed between months. N&B allows 0.01 direct labor hours per unit, and they produced 3,000,000 units in the last month of the quarter. This took the company 31,000 labor hours. N&B had variable overhead costs of $55,000 and fixed overhead costs of $42,000 in the month. What was the overhead variance for the month?
Group of answer choices
Option 1: $17,640 unfavorable.
Option 2: $20,200 favorable.
Option 3: $20,200 unfavorable.
Option 4: $17,640 favorable.
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