Milton6 Company uses a standard cost system in which manufacturing overhead costs are applied to units of product (widgets) on the basis of direct labor hours. Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour. Four pounds of material are needed for each widget at a standard cost of $2.25 per pound. The standard variable overhead rate is $3.50 per direct labor hour.

Milton6 actually produces 17,000 widgets during the year.

Direct labor costs are $359,100 for 34,200 hours.

Milton6 purchases 70,000 pounds of materials at $2.50 per pound, and used 65,400 pounds of those materials (the rest are in inventory at the end of the year)

Actual variable overhead costs $92,000.

For variable overhead, compute the spending(price) variance and label it is favorable (F) or unfavorable (U).

	A.	700 F
	B.	32,500 F
	C.	27,700 U
	D.	700 U
	E.	32,500 U
	F.	27,700 F
	G.	27,000 U
	H.	27,000 F