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A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. What is the variable overhead spending variance? Solution 540 units × ($76 var. OH per unit - $78 std. var. OH per unit) = $1,080 favorable variable overhead spending variance 540 units $76 var. 540 units' $78 std. OH per unit var. OH per unit $42,120 $41,040 $1,080 favorable

A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. What is the variable overhead spending variance? Solution 540 units × ($76 var. OH per unit - $78 std. var. OH per unit) = $1,080 favorable variable overhead spending variance 540 units $76 var. 540 units' $78 std. OH per unit var. OH per unit $42,120 $41,040 $1,080 favorable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 115.

A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. What is the variable overhead spending variance? Solution 540 units × ($76 var. OH per unit - $78 std. var. OH per unit) = $1,080 favorable variable overhead spending variance 540 units $76 var. 540 units' $78 std. OH per unit var. OH per unit $42,120 $41,040 $1,080 favorable
Transcribed Image Text:A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. What is the variable overhead spending variance? Solution 540 units × ($76 var. OH per unit - $78 std. var. OH per unit) = $1,080 favorable variable overhead spending variance 540 units $76 var. 540 units' $78 std. OH per unit var. OH per unit $42,120 $41,040 $1,080 favorable
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