Priority Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:Actual units produced: 9,000Actual variable overhead incurred: $54,400Actual machine hours worked: 16,000Standard variable overhead cost per machine hour: $3.50If Priority estimates two hours to manufacture a completed unit, the company's variable-overhead efficiency variance is:
A. $7,000 favorable.
B. $1,600 unfavorable.
C. $7,000 unfavorable.
D. $1,600 favorable.
E. None of the answers is correct.
Answer: A
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