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A company manufactures dolls for sale in toy stores. In planning for this year, the company estimated variable factory overhead of $600,000 and fixed factory
A company manufactures dolls for sale in toy stores. In planning for this year, the company estimated variable factory overhead of $600,000 and fixed factory overhead of $400,000. The company uses a standard costing system, and factory overhead is allocated to units produced on the basis of standard direct labor hours. The denominator level of activity budgeted for this year was 10,000 direct labor hours, and the company used 10,300 actual direct labor hours.Based on the output accomplished during this year, 9,900 standard direct labor hours should have been used. Actual variable factory overhead was $596,000, and actual fixed factory overhead was $410,000 for the year. Based on this information, the variable overhead spending variance for the company for this year was $2,000 unfavorable. $4,000 favorable. $24,000 unfavorable. $22,000 favorable
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