The Haney Corporation has a standard costing system.Variable manufacturing overhead is applied on the basis of direct labor-hours.The following data are available for January: • Actual variable manufacturing overhead: $25,500
• Actual direct labor-hours worked: 5,800
• Variable overhead rate variance: $600 Favorable
• Variable overhead efficiency variance: $2,475 Unfavorable
The standard hours allowed for January production is:

A) 5,975 hours
B) 5,800 hours
C) 5,425 hours
D) 5,250 hours

Standard Costing System

An accounting method that uses standard costs for product cost planning and control, involving setting predetermined costs for manufacturing activities.

Variable Overhead Efficiency Variance

Measures the difference between the actual hours taken to produce an item and the standard hours expected, multiplied by the variable overhead rate per hour.

Direct Labor-Hours

The total hours of labor directly involved in manufacturing a product or providing a service, which are directly attributable to the cost of creating that product or service.