Grubber Candy Corporation has developed cost standards for the production of its new chocolate, ChocO. The variable cost standards below relate to each 10 gallon batch of ChocO: Standard Cost Per BatchMilk chocolate (2 pounds × $0.85 per pound)$1.70 Direct labor (1.25 hours × $12.00 per hour)$15.00 Variable overhead (1.25 hours × $44.00 per hour)$55.00 Variable manufacturing overhead at Grubber is applied based on direct labor-hours. The actual results for last month were as follows: Number of batches produced 3,800Direct labor-hours incurred 4,510Pounds of chocolate purchased 9,000Pounds of chocolate used in production 7,880Cost of chocolate purchased$7,200Direct labor cost$53,218Variable manufacturing overhead cost$205,700What is ChocO's variable overhead efficiency
variance?
A. $7,260 Unfavorable
B. $39,050 Unfavorable
C. $10,560 Favorable
D. $31,240 Unfavorable
Answer: C
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