Underfoot Products uses standard costing. The following information about overhe

Question

Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate: $2 per machine hour Standard fixed overhead rate: $1 per machine hour Actual variable overhead costs: $381,000 Actual fixed overhead costs: $175,000 Budgeted fixed overhead costs: $190,000 Standard machine hours per unit produced: 10 Good units produced: 18,000 Actual machine hours:200,000 Compute the variable overhead spending variance. A. $19,000 (F) B. $19,000 (U) C. $39,000 (F) D. $49,000 (F)

Explanation / Answer

Variable overhead spending variance = AHSR - AHAR = 200000 x 2 - 381000 = $19000F (A) is the answer. Hope this helps!

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