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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

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Answers (1)
  1. 19 July, 01:18
    0
    c $4,450 U

    Explanation:

    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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