Question
Red Company Red Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is
Red Company
Red Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for May when Red produced 4,500 units:
| Standard: |
|
| DLH per unit | 2.50 |
| Variable overhead per DLH | $1.75 |
| Fixed overhead per DLH | $3.10 |
| Budgeted variable overhead | $21,875 |
| Budgeted fixed overhead | $38,750 |
|
|
|
| Actual: |
|
| Direct labor hours | 10,000 |
| Variable overhead | $26,250 |
| Fixed overhead | $38,000 |
15. What is the variable overhead spending variance?
| a. | $4,375 U | |
| b. | $4,375 F | |
| c. | $8,750 U | |
| d. | $6,562 U |
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College Accounting Ch 1-14
Authors: John Wild, Vernon Richardson, Ken Shaw
1st Edition
0073346896, 9780073346892
