Figure 9-3 Reynolds Manufacturing Company has the following information pertaining to a normal monthly 10,000 units of:
Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.
Standard factory overhead rates per direct labor hour are:

- Refer to Figure 9-3.What is the variable overhead spending variance for Reynolds?
A) $86,000 (
B) $0
C) $4,000 (
D) $10,000 (

Question

Figure 9-3 Reynolds Manufacturing Company has the following information pertaining to a normal monthly 10,000 units of:
Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.
Standard factory overhead rates per direct labor hour are:

- Refer to Figure 9-3.What is the variable overhead spending variance for Reynolds?
A) $86,000 (
B) $0 
C) $4,000 (
D) $10,000 (

Quizplus · Accepted Answer

Variable overhead spending variance = (Actual variable overhead rate - Standard variable overhead rate) x Actual direct labor hours
= (($300,000/11,000) - $2) x 10,000
= ($27.27 - $2) x 10,000
= $25.27 x 10,000
= $252,700
Since the actual overhead was $4,000 less than the expected variance, the variance is considered favorable or a $4,000 (F) variance. So, option (C) is correct.

Figure 9-3 Reynolds Manufacturing Company Has the Following Information Pertaining