Question

The following information for the past year is available from Thinnews Co., a company that uses machine hours to apply standard factory overhead cost to outputs:

Actual total factory overhead cost incurred	$	24,000
Actual fixed overhead cost incurred	$	10,000
Budgeted fixed overhead cost	$	11,000
Actual machine hours		5,000
Standard machine hours allowed for the units manufactured		4,800
Denominator volume—machine hours		5,500
Standard variable overhead rate per machine hour	$	3.00

The variable overhead spending variance, to the nearest whole dollar, is:

Multiple Choice

$2,100 favorable.

$1,400 unfavorable.

$1,500 favorable.

$600 unfavorable.

$1,000 favorable.

Answer 1

	Variable overhead spending variance
	Actual variable overhead - actual hours*standard VOH rate per hour
	14000   - 5000*3
	14000-15000
	1000	F
	Answer-	1000	F