QUESTION 11 Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000. Standard Price or Rate per unit Standard Quantity or Hours per unit 3 feet 1.5 direct labor hours 2 machine hours Standard Cost per unit $18 Direct Materials Direct Labor Variable Overhead $6 per foot $10 per direct labor hour $12 per machine hour $15 $24 Fixed Overhead 2 machine hours $15 per machine hour $30 Actual costs for the most recent period, during which 5,000 units of output were actually produced and used 9,600 machine hours, are given below: Direct Materials The firm purchased 16,000 feet at $6.30 per foot, but only used 14,500 feet in production. The firm used 7,150 direct labor hours and paid $11 per direct labor hour. Direct Labor Variable Overhead Actual variable overhead costs were $122,880. Actual fixed overhead costs were $142,000. Fixed Overhead What was the company's labor efficiency variance? A. $3,500 unfavorable OB. $3,850 unfavorable OC. $3,500 favorable OD.$3,850 favorable