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The data below relate to the month of May for Sosa Inc., which uses a standard cost system and two-variance analysis of overhead: Actual total

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

Actual total direct labor............................................................ $43,400

Actual hours used..................................................................... 14,000

Standard hours allowed for good output................................... 15,000

Direct labor rate variance—debit.............................................. $1,400

Actual total overhead................................................................ $40,250

Budgeted fixed costs................................................................ $9,000

“Normal” activity in hours........................................................ 18,000

Total overhead application rate per standard direct labor hour.. $3.00

What was Sosa’s volume variance for May?

a. $1,250 favorable c. $1,500 favorable

b. $1,250 unfavorable d. $1,500 unfavorable

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