Question 16:

Windsor Co. uses a standard job cost system with a normal capacity of 26,700 direct labour hours. Windsor Co. produces 13,000 units, which cost $220,500 for direct labour (24,500 hours), $29,900 for variable overhead, and $146,250 for fixed overhead. The standard variable overhead per unit is $2 (2 hours at $1 per hour), and the standard fixed overhead per unit is $10.40 (2 hours at $5.20 per hour). Calculate the fixed overhead spending (budget) variance. Fixed overhead spending variance V Neither favourable nor unfavourable Unfavourable Favourable