Maria's Bakery Bakes and Sells Cakes for Special Occasions

Multiple Choice

Maria's bakery bakes and sells cakes for special occasions. Each cake requires 2 hours of direct labour time for baking and decorating. Variable overhead is incurred at the rate of £2.50 per labour hour. During the month of May, Maria's bakery produced 500 cakes compared to a budgeted output figure of 460 cakes. Maria's employees worked for 980 hours during May. The total variable overhead cost for May was £2,620. What was Maria's variable overhead total variance for the month of May?

A) £50 Favourable
B) £120 Unfavourable
C) £170 Unfavourable
D) £320 Unfavourable