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Day Inc., uses a standard cost system. Last year's records showed the following information: Actual direct labor hours 35,500 Actual factory overhead ($35,000 fixed) $112,400

Day Inc., uses a standard cost system. Last year's records showed the following information:

Actual direct labor hours 35,500
Actual factory overhead ($35,000 fixed) $112,400
Actual units produced 12,000
Standard direct labor hours per unit 3
Standard variable overhead rate per direct labor hour $2
Standard fixed overhead rate per direct labor hour $0.75
The overhead budget for a 15,000 unit planned activity:
Variable overhead $90,000
Fixed overhead 33,750
Total $123,750

What is the variable overhead efficiency variance?

$6,400 unfavorable

$6,400 favorable

$1,000 unfavorable

$1,000 favorable

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