Answer: $2,000 favorable
Explanation:
Total variable overhead variance = Budgeted variable overhead - Actual total variable overhead
Budgeted variable overhead = Budgeted machine hours allowed for actual output * Budgeted variable overhead rate per machine hour
= 30,000 * 2.50
= $75,000
Total variable overhead variance = 75,000 - 73,000
= $2,000 favorable
Favorable because the actual amount was less than the budgeted one.
