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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
am. 115.
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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