ZDT Limited uses a standard costing system for all its products. ZDT Limited produces picture frames. The standard direct labour time to produce one picture frame is 20 minutes. Variable overhead is allocated to picture frames at the rate of £6 per direct labour hour. Budgeted production is 15,000 picture frames per month. In October, ZDT Limited produced 15,300 picture frames, incurring variable overhead costs of £32,000 and total labour hours paid were 4,800. What is the variable overhead expenditure variance for October?
A) £600 Favourable
B) £1,400 Unfavourable
C) £1,800 Favourable
D) £3,200 Unfavourable

Question

Quizplus · Accepted Answer

The Answer of ZDT Limited uses a standard costing system for all its products. ZDT Limited produces picture frames. The standard direct labour time to produce one picture frame is 20 minutes. Variable overhead is allocated to picture frames at the rate of £6 per direct labour hour. Budgeted production is 15,000 picture frames per month. In October, ZDT Limited produced 15,300 picture frames, incurring variable overhead costs of £32,000 and total labour hours paid were 4,800. What is the variable overhead expenditure variance for October?
A) £600 Favourable
B) £1,400 Unfavourable
C) £1,800 Favourable
D) £3,200 Unfavourable

ZDT Limited Uses a Standard Costing System for All Its