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Tyro Company Has a Standard Cost System That Applies Manufacturing

Question 118

Multiple Choice

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:  Actual Total Overhead Costs $15,000 Actual Fixed Overhead Costs $7,200 Budgeted Fixed Overhead Costs $7,000 Actual Hours Worked 3,500 DLHs  Standard Hours Allowed for the Output 3,800 DLHs  Variable Overhead Rate $2.50 per DLH \begin{array} { l r } \text { Actual Total Overhead Costs } & \$ 15,000 \\\text { Actual Fixed Overhead Costs } & \$ 7,200 \\\text { Budgeted Fixed Overhead Costs } & \$ 7,000 \\\text { Actual Hours Worked } & 3,500 \text { DLHs } \\\text { Standard Hours Allowed for the Output } & 3,800 \text { DLHs } \\\text { Variable Overhead Rate } & \$ 2.50 \text { per DLH }\end{array} 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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