Indian Company has the following information available for variable overhead costs.Direct labor hours are the cost driver for variable overhead costs.
$\begin{array}{ll}
\text { Actual variable overhead costs } & \$ 5,120 \
\text { Standard variable overhead costs } & \$ 3.00 \text { per hour } \
\text { Actual direct labor hours } & 2,000 \text { hours } \
\text { Standard direct labor hours per unit } & 3 \text { hours } \
\text { Units produced } & 1,000
\end{array}$
What is the variable overhead spending variance?
A) $880 Favorable
B) $1,000 Unfavorable
C) $3,880 Favorable
D) $3,880 Unfavorable

Question

Quizplus · Accepted Answer

Variable overhead spending variance = (Actual variable overhead costs - Standard variable overhead costs)= (5,120 - (3.00 * 2,000))= (5,120 - 6,000)= $880 Favorable

Indian Company Has the Following Information Available for Variable Overhead