Question

Aureolin Company manufactures toothpaste and packs them in tubes of 250 grams. Standard variable overhead rate...

Aureolin Company manufactures toothpaste and packs them in tubes of 250 grams.

Standard variable overhead rate (SVOR) $3.60 per direct labor hour
Actual variable overhead $72,756
Actual hours worked (AH) 22,210 hours
Hours allowed for production (SH) 18,000 hours


Determine the variable overhead spending variance.

a.$7,200 F

b.$7,956 U

c.$6,360 U

d.$6,580 F

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Answer #1

Variable overhead spending variance

= (SVOHR - AVOHR) * AH

= (3.60 - 72,756/22,210) * 22,210

= (3.60 - 3.28) * 22,210

= 7200 F

Option A is the answer

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