Question: Munoz Company established a predetermined variable overhead cost rate at $10.30 per direct labor hour. The actual variable overhead cost rate was $9.50 per hour.

Munoz Company established a predetermined variable overhead cost rate at $10.30 per direct labor hour. The actual variable overhead cost rate was $9.50 per hour. The planned level of labor activity was 74,000 hours of labor. The company actually used 79,300 hours of labor.

Required

Determine the total flexible budget variable overhead cost variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

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