A. Since indirect labor is treated as a variable cost, the unit labor cost is $2.40 ($144,000 ÷ (5,000 × 12)). The flexible budget amount of variable overhead (indirect labor) therefore equals $10,800 ($2.40 × 4,500). The flexible budget variance is equal to the actual amount of variable overhead minus the flexible budget amount of variable overhead. This gives us a favorable variance of $700 ($10,100 - $10,800).

B. The variance is favorable as the actual amount of indirect labor is less than the flexible budget amount.

C. This is calculated using the budgeted amount of units of production (5,000) instead of the actual units production (4,500).

D. The variance is favorable as the actual amount of indirect labor is less than flexible budget amount.