Jordan Company has the following information available for variable overhead cos

Question

Jordan Company has the following information available for variable overhead costs. Direct labor hours are the cost driver for variable overhead costs.

Actual variable overhead costs                             $4,750

Standard variable overhead costs             $1.25 per hour

Actual direct labor hours                              3,600 hours

Standard direct labor hours per unit                   5 hours

Units produced                                                        700

What is the variable overhead spending variance?

A) $250 Unfavorable

B) $250 Favorable

C) $450 Unfavorable

D) $450 Favorable

Explanation / Answer

Variable overhead spending variance = 4750-(3600*1.25)= $250 Unfavorable Option A is correct

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