Question
Q. A company uses direct labor hours(DLH) as the measure of activity. Data from flexible budget is as follows: Denominator of Activity- 7,400 DLH Overhead
Q. A company uses direct labor hours(DLH) as the measure of activity. Data from flexible budget is as follows:
Denominator of Activity- 7,400 DLH
Overhead costs of denominator level of Activity:
Variable overhead costs- $56,980. Fixed overhead costs- $95,090.
The following data relate to operations in the last period:
Actual Hours- 7,800 DLH. Standard hours allowed for the actual output- 7,700 DLH. Actual total variable overhead costs- $58,890. Actual Fixed Overhead Costss- $95,990
Assuming the standard variable overhead rate is $7.70 per DLH, what is the variable overhead spending variance for the last period? Also tell if favourable or unfavorable?
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