Question
Zero Company's standard factory overhead rate is $3.65 per direct labor hour (DLH), calculated at 90% capacity = 800 standard DLHs. In December, the company
Zero Company's standard factory overhead rate is $3.65 per direct labor hour (DLH), calculated at 90% capacity = 800 standard DLHs. In December, the company operated at 80% of capacity, or 711 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,290, of which $1,400 is fixed overhead. For December, the actual factory overhead cost was $3,920 for 750 actual DLHs, of which $1,360 was for fixed factory overhead.
Under a three-way breakdown (decomposition) of the total overhead variance, what is the total factory overhead spending variance for Zero Company in December (to the nearest whole dollar)? (Round your intermediate calculation to 2 decimal places.)
Multiple Choice
N/Athis variance doesn't exist under a three-way breakdown of the total overhead variance.
$390 unfavorable.
$525 unfavorable.
$190 favorable.
$565 unfavorable.
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