Insight Company's standard factory overhead application rate is $$3\mathrm{.}75$ per direct labor hour $($DLH$),$ calculated

at $90\%$ capacity $=900$ standard DLHs$.$ In December, the company operated at $80\%$ of capacity, or $800$

standard DLHs$.$ Budgeted factory overhead at $80\%$ of capacity is $$3,150,$ of which $$1,350$ is fixed overhead.

For December, the actual factory overhead cost incurred was $$3,800$ for $840$ actual DLHs$,$ of which $$1,300$

was for fixed factory overhead.

If Insight Company uses a two$-$way breakdown $($decomposition$)$ of the total overhead varlance, what is the

total factory overhead flexible budget varlance for December?

Multiple Choice

$$650$ unfavorable.

$$225$ favorable.

$$0$

$$690$ unfavorable.

$$425$ unfavorable.