Question

Troubleshooting 24 Help Check Part 5 of 6 Required information The following information applies to the questions displayed below.) Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: 02-2007 Direct materials: 5 kg at $9.00 per kg Direct labour: 3 hours at $14 per hour Variable overhead: 3 hours at $9 per hour $ 45.ee 42.ee 27.00 Print Total standard cost per unit $ 114.00 The company planned to produce and sell 20,000 units in March. However, during March the company actually produced and sold 24,800 units and incurred the following costs: a. Purchased 155,000 kg of raw materials at a cost of $7.20 per kg. All of this material was used in production b. Direct labour: 65,000 hours at a rate of $15 per hour. c. Total variable manufacturing overhead for the month was $612,300. 7. What is the variable overhead spending variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance...) Variable overhead spending variance 24 < Prev 25 Next > of 31

Answer 1

Actual Output			24,800
Multiply: Std Variable OH cost per unit	27.00
Variable OH as per Flexible Budget	6,69,600
Actual Variable OH incurred		6,12,300
Variable OH Spending variance		57,300	Fav
(Favorable as actual overheads incurred is lower)
Variable Mfg OH spending variance	57,300	Fav