Question
Gerhan Company's flexible budget for the units manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During
Gerhan Company's flexible budget for the units manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May, the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 5,850 DLHs, which represents 90% of available capacity. The company worked 5,000 DLHs and incurred $16,800 of total factory overhead cost during May, including $5,600 for fixed factory overhead.
Under a three-variance breakdown (decomposition) of the total overhead variance, what is thetotal factory overhead spending variance(to the nearest whole dollar) for May?(Round your intermediate calculation to 2 decimal places.)
A. $419 favorable
B. $599 unfavorable
C. $1,279 unfavorable
D. $499 unfavorable
E. N/A-- this variance does not exist in a three-variance analysis of the total overhead variance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started