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Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences. What is the variable overhead spending variance?   Select one: a. $700 U b. $700 F c. $2,500 U d. $2,500 F e. None of the above

Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences. What is the variable overhead spending variance?   Select one: a. $700 U b. $700 F c. $2,500 U d. $2,500 F e. None of the above

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 17E: Calculating factory overhead: two variances Munoz Manufacturing Co. normally produces 10,000 units...
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Kraig Fencing considers 4,000 direct labor hours or 100 fences to be its normal monthly capacity. Its standard variable overhead rate is $9 per direct labor hour. During the current month, $33,500 of variable overhead costs were incurred in working 3,800 direct labor hours to complete 92 fences.

What is the variable overhead spending variance?

 

Select one:
a. $700 U
b. $700 F
c. $2,500 U
d. $2,500 F
e. None of the above 
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