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A Manufacturing Company That Has Only One Product Has Established

Question 134

Multiple Choice

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses machine hours as its measure of activity.
 Standard Hours per Unit of Output 8.1 machine hours  Standard Variable Overhead Rate $14.30 per machine hour \begin{array}{|l|r|}\hline \text { Standard Hours per Unit of Output } & 8.1 \text { machine hours } \\\hline \text { Standard Variable Overhead Rate } & \$ 14.30 \text { per machine hour } \\\hline\end{array}
The following data pertain to operations for the last month:
 Actual Hours 1,700 machine hours  Actual Total Variable Overhead Cost $24,905 Actual Output 200 units \begin{array}{|l|r|}\hline \text { Actual Hours } & 1,700 \text { machine hours } \\\hline \text { Actual Total Variable Overhead Cost } & \$ 24,905 \\\hline \text { Actual Output } & 200 \text { units } \\\hline\end{array}
-What was the variable overhead spending variance for the month?


A) $595 favourable.
B) $595 unfavourable.
C) $1,739 favourable.
D) $1,739 unfavourable.

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