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Assume the following information appears in the standard cost card for a company that makes only one product: Standard Quantity or Hours Standard Price or
Assume the following information appears in the standard cost card for a company that makes only one product:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost | ||||||
Direct materials | 5 | pounds | $ | 11.00 | per pound | $ | 55.00 | |
Direct labor | 2 | hours | $ | 17.00 | per hour | $ | 34.00 | |
Variable manufacturing overhead | 2 | hours | $ | 3.00 | per hour | $ | 6.00 | |
During the most recent period, the following additional information was available:
- 20,000 pounds of material was purchased at a cost of $10.50 per pound.
- All of the material that was purchased was used to produce 3,900 units.
- 8,000 direct labor-hours were recorded at a total cost of $132,000.
- The actual variable overhead cost incurred during the period was $25,000.
Assuming the company uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead spending variance?
Garrison 17e Rechecks 2020-09-29
Multiple Choice
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$1,600 F
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$1,600 U
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$1,000 U
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$1,000 F
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