A firm uses a standard costing system and allocates variable overhead costs base

Question

A firm uses a standard costing system and allocates variable overhead costs based on direct labor hours. The annual budget projected 1,000 finished units, 10,000 hours of direct labor, and $100,000 of variable overhead costs. At the end of the year, 750 units were completed using 8,000 hours of direct labor and $75,000 in variable overhead. What is the variable overhead spending variance? A. $0 B. $25,000 favorable. C. $5,000 unfavorable. D. $5,000 favorable. A firm uses a standard costing system and allocates variable overhead costs based on direct labor hours. The annual budget projected 1,000 finished units, 10,000 hours of direct labor, and $100,000 of variable overhead costs. At the end of the year, 750 units were completed using 8,000 hours of direct labor and $75,000 in variable overhead. What is the variable overhead spending variance? A. $0 B. $25,000 favorable. C. $5,000 unfavorable. D. $5,000 favorable.

Explanation / Answer

A. $0 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Variable overhead costper unit =100,000/1,000                   100.00 Standard Variable overhead for 750 Units = 750 * 100             75,000.00 Actual Variable overhead             75,000.00 Variable overhead spending variance= Standard VO - Actual VO Variable overhead spending variance= 75,000 - 75,000 Variable overhead spending variance= 0

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.