Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July:
The variable overhead rate variance for the month is closest to:

A) $228 Favorable
B) $246 Unfavorable
C) $246 Favorable
D) $228 Unfavorable

To calculate the variable overhead rate variance, we need to first calculate the actual direct labor-hours worked:
Actual Direct Labor-Hours = Actual Labor Hours x Actual Production = 1,525 x 800 = 1,220,000

Next, we can calculate the amount of variable overhead that should have been applied based on the standard rate:
Standard Variable Overhead Rate = Variable Manufacturing Overhead / Standard Direct Labor-Hours = $2,440 / 1,200 = $2.03 per DLH
Expected Variable Overhead = Standard Variable Overhead Rate x Actual Direct Labor-Hours = $2.03 x 1,220,000 = $2,476,600

Finally, we can calculate the variable overhead rate variance:
Variable Overhead Rate Variance = Actual Variable Overhead - Expected Variable Overhead
Actual Variable Overhead = $2,500,000
Variable Overhead Rate Variance = $2,500,000 - $2,476,600 = $23,400 unfavorable

Therefore, the closest answer choice is B) $246 Unfavorable.