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

Direct Materials $100,000

Director 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 Lantern evaluated performance by the use of a flexible budget, a performance report would reveal a total variance of $3,000 favorable. How do you arrive at this answer?