Use the following information for the next 5 questions.
Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labor hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labor hour, respectively. Data relevant for the current period include:
-The variable overhead spending variance is
A) $930 Favorable
B) $2,070 Unfavorable
C) $33,000 Unfavorable
D) $33,000 Favorable

Question

Use the following information for the next 5 questions.
Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labor hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labor hour, respectively. Data relevant for the current period include: 
-The variable overhead spending variance is
A) $930 Favorable 
B) $2,070 Unfavorable 
C) $33,000 Unfavorable 
D) $33,000 Favorable

Quizplus · Accepted Answer

The variable overhead spending variance is calculated as the difference between actual variable overhead costs and the budgeted variable overhead costs based on actual hours worked. The given options suggest that the variance is $2,070 Unfavorable.

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