Microsoft Inc. has large overheads in their headquarters at Seattle. Microsoft applies overhead based on direct labor hours. The variable overhead standard is 8 hours at $3.70 per hour. During October, Microsoft Company spent $158,700 for variable overhead. 46,440 labor hours were used to produce 6,300 units. What is the variable overhead rate variance for Microsoft?

Multiple Choice

• $13,128 favorable

• $14,652 favorable

• $27,780 favorable

• $14,652 unfavorable