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The predetermined overhead rate for Minnion Company is $7, comprised of a variable overhead rate of $4 and a fixed rate of $3. The amount

The predetermined overhead rate for Minnion Company is $7, comprised of a variable overhead rate of $4 and a fixed rate of $3. The amount of budgeted overhead costs at normal capacity of $210,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $7. Actual overhead for December was $38,700 variable and $9,300 fixed, and 3,500 units were produced. The direct labor standard is 2 hours per unit produced. The total overhead variance is

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$9,700 unfavorable

$1,000 unfavorable

$1,000 favorable

$9,700 favorable

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