McLennan Company’s static budget overhead costs and actual overhead costs are given below for March.

	Static Budget	Actual
Units produced	100,000	80,000
Variable overhead costs:
Indirect materials	$20,000	$19,300
Indirect labor	40,000	39,000
Utilities	50,000	48,500
Fixed overhead costs:
Insurance	40,000	40,500
Rent	20,000	21,000

 

The flexible budget variance for insurance on the company’s March flexible budget performance report was: 

$8,500 favorable

$8,500 unfavorable

$500 favorable

$500 unfavorable

Answer rating: 100% (QA)

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