A firm uses a standard costing system and allocates variable overhead costs based on

direct labor hours. The annual budget projected 1,000 finished units, 10,000 hours of

direct labor, and $100,000 of variable overhead costs. At the end of the year, 750 units

were completed using 8,000 hours of direct labor and $75,000 in variable overhead. What

is the variable overhead spending variance?

A. $0

B. $5,000 favorable.

C. $5,000 unfavorable.

D. $25,000 favorable