Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours. Two direct labor-hours are required for each unit produced. The denominator activity was set at 12,600 units. Manufacturing overhead was budgeted at $252,000 for the period; 20 percent of this cost was fixed. The 24,400 hours worked during the period resulted in production of 11,500 units. Variable manufacturing overhead cost incurred was $200,400 and fixed manufacturing overhead cost was $50,500.
The variable overhead efficiency variance for the period was:
$100 Unfavorable
$5,200 Unfavorable
$11,200 Unfavorable
$4,400 Unfavorable