(Answered) Hermetic systems allocates manufacturing overhead based on

Accounting

Hermetic Systems allocates manufacturing overhead based on machine hours. Each connector should require 13 machine hours. According to the static budget, Hermetic expected to incur the following:

1,300 machine hours per month (100 connectors x 13 machine hours per connector)

$6,500 in variable manufacturing overhead costs

$9450 in fixed manufacturing costs

During August, Hermetic actually used 800 machine hours to make 85 connectors and spent $5,200 in variable manufacturing $8,800 in fixed manufacturing overhead costs. Calculate the variable overhead cost variance for Hermetic.

A. $2,725 Favorable

B. $325 Favorable

C. $1,525 Favorable

D. $1,200 Unfavorable

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