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The data below relate to the month of April for Monroe, Inc., which uses a standard cost system and a two-variance analysis of factory overhead:

The data below relate to the month of April for Monroe, Inc., which uses a standard cost system and a two-variance analysis of factory overhead:

Actual direct labor hours used

16,500

Standard direct labor hours allowed

16,250

Actual total factory overhead

$53,200

Budgeted fixed factory overhead

$12,000

Budgeted activity in hours

16,000

Total overhead application rate per standard direct labor hour

$3.25

Variable overhead application rate per standard direct labor hour

$2.50

What was Monroe's production-volume variance for April?

a.

$187.50 favorable

b.

$187.50 unfavorable

c.

$437.50 favorable

d.

$437.50 unfavorable

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