Abbott has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow. Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 Abbott's variable-overhead efficiency variance is:

$20,000 favorable.

$20,000 unfavorable.

$27,000 favorable.

$27,000 unfavorable.

None of the other answers are correct.

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