Question

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

Answer 1

Answer:

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