Question 23(1 point)

Reference: 10-17

The Ferris Company applies manufacturing overhead costs to products on the basis of direct labour hours. The standard cost card shows that 3 direct labour hours are required per unit of product. For August, the company budgeted to work 90,000 direct labour hours and to incur the following total manufacturing overhead costs:

Total Variable Overhead Costs $99,000

Total Fixed Overhead Costs $118,000

During August, the company completed 28,000 units of product, worked 86,000 direct labour hours, and incurred the following total manufacturing overhead costs:

Total Variable Overhead Costs $98,900

Total Fixed Overhead Costs $115,300

The denominator activity used for the predetermined overhead rate was 90,000 direct labour hours.

For August, what was the variable overhead spending variance?

Question 23 options:

A)

$6,500 favourable.

B)

$6,500 unfavourable.

C)

$4,300 favourable.

D)

$4,300 unfavourable.