Atkinson Landscaping
Atkinson Landscaping applies variable overhead based on direct labour hours. At the beginning of the current year, Atkinson had estimated the following:
$\begin{array}{lr}
\text { Estimated variable overhead } & \$ 56000 \
\text { Estimated units of production } & 10000 \text { units } \
\text { Standard direct labour hours per unit } & 2.5 \text { hours }
\end{array}$
During the year, 11 000 units were produced using a total of 27 200 direct labour hours and actual overhead costs were $60 000.
-Atkinson's variable overhead spending variance for the year was:
A) $ 672 F
B) $ 928 F
C) $4000 U
D) $ 145 U

Question

Quizplus · Accepted Answer

The formula for the variable overhead spending variance is:

Actual variable overhead - (Actual hours worked x Standard variable overhead rate)

Using the given data:

Actual variable overhead = $10,200
Actual hours worked = 1,600
Standard variable overhead rate = $6 per hour

Plugging in the values:

$10,200 - (1,600 x $6) = $928 F

Therefore, the correct answer is B) $ 928 F.

Atkinson Landscaping Atkinson Landscaping Applies Variable Overhead Based on Direct

Atkinson Landscaping
Atkinson Landscaping Applies Variable Overhead Based on Direct