ASAP!

H&B Inc. uses a standard cost system and calculates their application rates using direct labour hours.

This year the company had the following standards:

Standard direct labour hours per unit: 2 hours

Variable overhead application rate: $5 per direct labour hour

Fixed overhead application rate: $7 per direct labour hour

The company also had the following actuals:

Production: 17,000 units

Variable overhead: $195,840

Fixed overhead: $271,320

Total direct labour hours: 40,800

What is the fixed overhead spending variance?

Question 5 options:

a)	$33,320 unfavourable

b)	$33,320 favourable

c)	$14,280 unfavourable

d)	$14,280 favourable

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