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

Question

Business

Elias Fry

28 October, 11:30

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

+2

Answers (1)

Know the Answer?

Samir Vaughn · Answer 1

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