Zero Company's standard factory overhead application rate is $3.63 per direct labor hour (DLH), calculated at 90% capacity = 1,000 standard DLHs. In December, the company operated at 80% of capacity, or 889 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,010, of which $1,340 is fixed overhead. For December, the actual factory overhead cost incurred was $3,600 for 850 actual DLHs, of which $1,450 was for fixed factory overhead.

If Zero Company uses a two-way breakdown (decomposition) of the total overhead variance, what is the total factory overhead flexible-budget variance for December (to the nearest whole dollar)? (Do not round intermediate calculations.)

Multiple Choice

• N/Athis variance doesn't exist under a two-way breakdown of the total overhead variance.

• $165 favorable.

• $365 unfavorable.

• $590 unfavorable.

• $630 unfavorable.