Log in

View Full Version : What is the variable overhead spending variance for the month?


mikeyom
Oct 26, 2015, 10:18 AM
The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output 5.6 hours
Standard variable overhead rate $12.00 per hour

The following data pertain to operations for the last month:

Actual hours worked 2,600 hours
Actual variable overhead cost $31,330
Actual output 400 units

What is the variable overhead spending variance for the month?

Choose 1 answer
A. $100 unfavorable
B. $130 unfavorable
C. $163 unfavorable
D. $250 favorable

smoothy
Oct 26, 2015, 10:21 AM
You forgot to cut and paste the work you did and the answer you got as well. Since we don't do your homework for you and you have shown no effort to do it yourself

mikeyom
Oct 26, 2015, 08:35 PM
This is what I got but it's wrong.

Spending Variance (AH x AR) - (SH x SR)
AH = 2,600
AR = (31330 / 400) = 12.05
SH = 5.6 x 400 = 2240
SR = 12

(2600 x 12.05) - (2240 x 12) = 4450

paraclete
Oct 27, 2015, 02:46 AM
The spending variance is the difference between the actual and the standard

so the actual is 31,330 the standard is 5.6 x 400 x 12 (26880)

do you think there might be some data missing?

mikeyom
Oct 27, 2015, 08:07 AM
(2600 x 12.05) - (2240 x 12) = $4,450 Unfavorable.
However, $4,450 is not one of answer list.

Choose 1 answer
A. $100 unfavorable
B. $130 unfavorable
C. $163 unfavorable
D. $250 favorable

paraclete
Oct 28, 2015, 11:17 PM
This is why I asked you if there is some data missing