Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below: Variable overhead (5 hours @ $12 per direct manufacturing labor hour) $60 Fixed overhead (5 hours @ $15* per direct manufacturing labor hour) Total overhead per switch 75 $135 *Based on capacity of 200,000 direct manufacturing labor hours per month. The following information is available for the month of December: 46,000 switches were produced although 40,000 switches were scheduled to be produced. 225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000. Variable manufacturing overhead costs were $2,750,000. Fixed manufacturing overhead costs were $3,050,000. The variable overhead spending variance for December was O A. $50,000 U. O B. $10,000 F. O C. $60,000 F. O D. $350,000 U.

Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below: Variable overhead (5 hours @ $12 per direct manufacturing labor hour) $60 Fixed overhead (5 hours @ $15* per direct manufacturing labor hour) Total overhead per switch 75 $135 *Based on capacity of 200,000 direct manufacturing labor hours per month. The following information is available for the month of December: 46,000 switches were produced although 40,000 switches were scheduled to be produced. 225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000. Variable manufacturing overhead costs were $2,750,000. Fixed manufacturing overhead costs were $3,050,000. The variable overhead spending variance for December was O A. $50,000 U. O B. $10,000 F. O C. $60,000 F. O D. $350,000 U.

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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