Question
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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