Guadalupe Manufacturing Company Uses a Standard Cost System with Direct

Multiple Choice

Guadalupe Manufacturing Company uses a standard cost system with direct labor-hours as the activity base for overhead.Last year,Guadalupe applied a total of $936,000 of fixed manufacturing overhead cost to the products it produced.The following data relate to production for the year: $\begin{array}{llcc} \text { Denominator activity level in direct labor-hours............... } &80,000 \\ \text { Standard direct labor-hours allowed for actual output...... } &75,000\\ \text { Actual number of direct labor-hours incurred................... } &78,000\\\end{array}$
What was Guadalupe's fixed manufacturing overhead volume variance?

A) $23,400 favorable
B) $62,400 unfavorable
C) $37,440 unfavorable
D) $58,500 favorable