Reference no: EM132603059

Quest Company manufactured 2,500 units during April with a total overhead flexible budget of $46,800. However, while manufacturing the 2,500 units the microcomputer that contained the month's cost information broke down. With the computer out of commission, the accountant has been unable to complete the variance analysis report. The following information has been retrieved:

Variable overhead:

Standard cost per unit: 1.2 labor hour at $10 per hour

Actual costs: $26,250 for 2,250 hours

Fixed overhead:

Flexible-budget variance: $200 favorable

Flexible Budget: $16,800

Standard cost per unit: 1.2 labor hours at $7 per hour

Overhead cost is driven by labor hours and 1.2 labor hours were allowed per unit.

Question 1: How much is the total over/under allocated?

Option 1: $8,150 under

Option 2: $8,150 over

Option 3: $4,400 under

Option 4: $4,400 over