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Tyro Company has a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs). The following

Tyro Company has a standard cost system that applies manufacturing overhead to units

of product on the basis of direct labour hours (DLHs). The following information is

available:

6

Actual total overhead costs $15,000

Actual fixed overhead costs $ 7,200

Budgeted fixed overhead costs $ 7,000

Actual hours worked 3,500 DLH

Standard hours allowed for the output 3,800 DLH

Standard variable overhead rate 2.50 per DLH

Based on these data, what was the variable overhead spending variance?

A. $750 unfavourable.

B. $950 favourable.

C. $1,500 unfavourable.

D. $1,700 favourable.

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