Question
Insight Company's standard factory overhead rate is $3.87 per direct labor hour (DLH), calculated at 90% capacity = 800 standard DLHs. In December, the company
Insight Company's standard factory overhead rate is $3.87 per direct labor hour (DLH), calculated at 90% capacity = 800 standard DLHs. In December, the company operated at 80% of capacity, or 711 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,000, of which $1,400 is fixed overhead. For December, the actual factory overhead cost was $3,770 for 700 actual DLHs, of which $1,310 was for fixed factory overhead.
Under a four-way breakdown (decomposition) of the total overhead variance, what is the variable factory overhead spending variance for Insight Company for December?
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