US CMA Part 1 · Chapter 3 · Question 10 of 30
Variable overhead is applied at $4.80 per direct labor hour. Actual variable overhead was $61,200, actual hours were 12,400 and standard hours allowed for actual output were 12,500. What is the variable overhead spending variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $1,680 unfavorable
Explanation
Spending variance = actual variable overhead - (actual hours x standard rate) = $61,200 - (12,400 x $4.80) = $61,200 - $59,520 = $1,680 unfavorable.
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