Gerhan Company's Flexible Budget for the Units Manufactured in May

Multiple Choice

Gerhan Company's flexible budget for the units manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May, the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH) , based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May, including $6,800 for fixed factory overhead.

What is the total factory overhead flexible-budget variance (to the nearest whole dollar) for Gerhan Company in May?

A) $380 unfavorable.
B) $680 unfavorable.
C) $860 unfavorable.
D) $1,160 unfavorable.
E) $1,360 unfavorable.