Question - Cady Machine Shop used 15,000 machine hours during January. It takes 0.90 machine-hours to produce one unit; 15,000 units were produced during the month. Budgeted production included 12,000 units, using 10,800 machine hours. Budgeted variable manufacturing overhead costs per machine-hour is $22.50.
What is the variable overhead efficiency variance for Cady?
a. $67,500 favourable
b. $37,000 favourable
c. $33,750 unfavourable
d. $67,500 unfavourable
e. $33,750 favourable