Montana Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are $5 and $3 per unit, respectively. Cost and production data for May follow:

Production for the month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 units

Direct labor hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18,500 hours

Factory overhead incurred for:

Variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,500

Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,000

a. Calculate the flexible-budget variance.

b. Calculate the production-volume variance.

c. Was the total factory overhead under or overapplied? By what amount?