Zero Company's standard factory overhead rate is $3.72 per direct labor hour (DLH), calculated at 90.00% capacity = 900 standard DLHs. In December, the company operated at 79.00% of capacity, or 790 standard DLHs. Budgeted factory overhead at 79.00% of capacity is $3,138, of which $1,350 is fixed overhead. For December, the actual factory overhead cost was $3,790 for 841 actual DLHs, of which $1,300 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?
A) $537 unfavorable
B) $165 unfavorable
C) $587 unfavorable
D) $115 unfavorable
E) N/Athis variance doesn't exist under a three-way breakdown of the total overhead variance.