Question
In March, Leona Company made 4,500 units of its product. Leona uses a standard cost system and applies overhead cost based on direct labor hours.
In March, Leona Company made 4,500 units of its product. Leona uses a standard cost system and applies overhead cost based on direct labor hours.
| Standard: | |
| DLH per unit | 2.50 |
| Variable overhead per DLH | $1.75 |
| Fixed overhead per DLH | $3.10 |
| Budgeted variable overhead | $21,875 |
| Budgeted fixed overhead | $38,750 |
| Actual: | |
| Direct labor hours | 10,000 |
| Variable overhead | $26,250 |
| Fixed overhead | $38,000 |
Refer to LeonaCompany. Using the four-variance approach, what is the fixed overhead spending variance?
| a. | $7,000.00 U | |
| b. | $ 750.00 F | |
| c. | $ 750.00 U | |
| d. | $3,125.00 F |
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Performance Auditing A Measurement Approach
Authors: Ronell B. Raaum, Stephen L. Morgan
4th Edition
0894134647, 978-0894134647
