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Chong Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows: Direct materials $100,000 Direct labor 50,000 Variable overhead 75,000

Chong Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows:

Direct materials $100,000

Direct labor 50,000

Variable overhead 75,000

Fixed overhead 100,000

Actual units produced amounted to 60,000. Actual costs incurred were: direct materials, $110,000; direct labor, $60,000; variable overhead, $100,000; and fixed overhead, $97,000. If Chong evaluated performance by the use of a flexible budget, a performance report would reveal a total variance of:

A. $3,000 favorable.

B. $23,000 favorable.

C. $27,000 unfavorable.

D. $42,000 unfavorable.

E. None of the answers is correct.

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