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A firm has applies variable overhead with a standard rate of $10 per direct labor hour (assume there is no fixed overhead for this problem).

A firm has applies variable overhead with a standard rate of $10 per direct labor hour (assume there is no fixed overhead for this problem). The firm's static budget predicted 5,000 finished goods units (and the standard is for 0.5 direct labor hours to be used per finished good unit). This period's actual finished goods units were 6,000.

The firm's actual direct labor hours were 2,250, and the total actual variable overhead costs were $27,000.

What is the firm's variable overhead price variance (round final answer to nearest cent if necessary)?

a.

$3,000 favorable

b.

$4,500 favorable

c.

$3,000 unfavorable

d.

$4,500 unfavorable

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