Miguez Corporation Makes a Product with the Following Standard Costs

Multiple Choice

Miguez Corporation makes a product with the following standard costs: The company budgeted for production of 3,300 units in September, but actual production was 3,200 units. The company used 6,140 liters of direct material and 1,750 direct labor-hours to produce this output. The company purchased 6,500 liters of the direct material at $7.90 per liter. The actual direct labor rate was $31.10 per hour and the actual variable overhead rate was $2.60 per hour.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The variable overhead rate variance for September is:

A) $128 Favorable
B) $175 Unfavorable
C) $175 Favorable
D) $128 Unfavorable