Use the information below to answer the following question(s).

Michelle Inc. uses a level 4 variance analysis of its manufacturing overhead costs and has the following results for April.

A. Budgeted direct labour-hours per unit is used to allocate variable manufacturing overhead. Fixed overhead is allocated on a per unit basis.

B. Budgeted amounts for April are:

Direct labour-hours	0.30/unit
Variable labour-hour overhead rate	$20.00/DLH
Fixed manufacturing overhead	$630,000
Budgeted output (denominator level output)	30,000 units

C. Actual amounts for April are:

Variable manufacturing overhead	$340,000
Fixed manufacturing overhead	$590,000
Direct labour-hours	16,000 hours
Actual output	40,000 units

What is the Michelle Inc. variable manufacturing overhead rate variance?

a.

$16,000 favourable

b.

$16,000 unfavourable

c.

$4,000 unfavourable

d.

$30,000 unfavourable

e.

$28,500 favourable