Use the following information for the next 6 questions.
Hyteck, Inc. is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget.
-The variable overhead spending variance was
A) $1,200 F
B) $2,000 F
C) $2,800 U
D) $1,600 U

Question

Use the following information for the next 6 questions.
Hyteck, Inc. is a capital intensive firm. Indirect costs make up nearly 70% of the product costs. The company has no direct material costs because customers provide the direct materials used for each job. To plan and control such costs, the firm employs flexible budgets and standard costs. Overhead rates, based on direct labor hours, are derived from the master budget. 
-The variable overhead spending variance was
A) $1,200 F 
B) $2,000 F 
C) $2,800 U 
D) $1,600 U

Quizplus · Accepted Answer

The variable overhead spending variance is unfavorable (U) by $2,800, indicating that the actual variable overhead costs were higher than expected.

Use the Following Information for the Next 6 Questions