Relevant information for Product A follows: Actual variable overhead cost per hour $8.00 Standard variable overhead cost per hour $7.50 Actual hours 4,500 Standard hours 5,000 What was the variable overhead spending variance for Product A?

Question

Business

Camden Hurst

17 May, 09:41

Relevant information for Product A follows: Actual variable overhead cost per hour $8.00 Standard variable overhead cost per hour $7.50 Actual hours 4,500 Standard hours 5,000 What was the variable overhead spending variance for Product A?

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Answers (1)

Know the Answer?

Martin Baker · Answer 1

variable overhead spending variance = $2,250

Explanation:

given data

Actual variable overhead cost per hour = $8.00

Standard variable overhead cost per hour = $7.50

Actual hours = 4,500

Standard hours = 5,000

to find out

variable overhead spending variance

solution

we know Actual hours and Application rate

so Total actual will be here = Actual hours * Application rate ... 1

Total actual = 4,500 * $8

Total actual = $36000

and

Total actual Standard will be = Standard variable * Actual hours ... 2

Total actual for Standard will be = 4,500 * $7.50

Total actual for Standard = $33750

so

variable overhead spending variance = Total actual - Total actual for Standard ... 3

variable overhead spending variance = $36000 - $33750

variable overhead spending variance = $2,250