Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the labor efficiency variance is favorable, the variable overhead efficiency variance will be:

a. either favorable or unfavorable.
b. unfavorable.
c. favorable.
d. zero.

Assume the perpetual inventory method is used. 1) the company purchased $12,500 of merchandise on account under terms 2/10, n/30. 2) the company returned $1,200 of merchandise to the supplier before payment was made. 3) the liability was paid within the discount period. 4) all of the merchandise purchased was sold for $18,800 cash. what effect will the return of merchandise to the supplier have on the accounting equation?