Question

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: 55.00 36.00 Direct materials: 5 $ kg at $11.00 per kg Direct labour: 3 hours at $12 per hour Variable overhead: 3 hours at $7 per hour 21.00 $ 112.00 Total standard cost per unit The company planned to produce and sell

Answer 1

Variable OH spending variance:

( Actual variable OH	-	Standard variable OH )	X	Actual hours
( 8.11	-	7)	X	63,000
(510,930 / 63,000)		(given)

Variable OH spending variance = 69,930 U