A company's flexible budget for the range of 38,000 units to 48,000 units of production showed variable overhead costs of $2.00 per unit and fixed overhead costs of $64,000. The company incurred total overhead costs of $142,700 while operating at a volume of 40,000 units. The total controllable cost variance is: I know the answer is C 1300 favorable, but not sure how they came up with that.

Multiple Choice

a. $2,700 favorable.

b. $2,700 unfavorable.

c. $1,300 favorable.

d. $1,300 unfavorable.

e. $10,000 favorable.