19 July, 00:10
The following standards for variable manufacturing overhead have been established for a company that makes only one product:
Standard hours per unit of output 5.6 hours
Standard variable overhead rate $12.00 per hour
The following data pertain to operations for the last month:
Actual hours 2,600 hours
Actual total variable overhead cost $31,330
Actual output 400 units
What is the variable overhead spending variance for the month?
a $112 F
b $130 U
c $4,450 U
d $4,338 U
19 July, 01:18
c $4,450 U
The computation of the Variable overhead spending variance is shown below:
= (Standard variable overhead Rate * Actual Hour) - (Actual Rate * Actual Hour)
= ($12 * 400 units * 5.6 hours) - ($31,330)
= $26,880 - $31,330
= $4,450 Unfavorable
The (Actual Rate * Actual Hour) is also called as Actual variable overhead.
All other information which is given is not relevant. Hence, ignored it
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» The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 5.6 hours Standard variable overhead rate $12.