Bartoletti Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $8.40 per MH. The company had budgeted its fixed manufacturing overhead cost at $61,000 for the month. During the month, the actual total variable manufacturing overhead was $66,850 and the actual total fixed manufacturing overhead was $65,000. The actual level of activity for the period was 7,500 MHs. What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?

Multiple Choice

$7,850 favorable

$7,850 unfavorable

$3,850 unfavorable

$3,850 favorable