Chapter 8, Problem 8.20MCQ

Fordham Corporation produces a single product. The standard costs for one unit of its Concourse product are as follows:

Direct materials (6 pounds at $0.50 per pound)	$ 3
Direct labor (2 hours at $10 per hour)	20
Variable manufacturing overhead (2 hours at $5 per hour)	10
Total	33

During November Year 2, 4,000 units of Concourse were produced. The costs associated with November operations were as follows:

Material purchased (36,000 pounds at $0.60 per pound)	$21,600
Material used in production (28,000 pounds)
Direct labor (8,200 hours at $9.75 per hour)	79,950
Variable manufacturing overhead incurred	41,820

What is the variable overhead efficiency variance for Concourse for November Year 2?

1. 1. $2,000 favorable.
2. 2. $2,000 unfavorable.
3. 3. $1,000 favorable.
4. 4. $1,000 unfavorable.