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Homework answers / question archive / When preparing flexible budget, MAYAR Corporation has the following information available for variable overhead costs

When preparing flexible budget, MAYAR Corporation has the following information available for variable overhead costs

Accounting

When preparing flexible budget, MAYAR Corporation has the following information available for variable overhead costs. Direct labor hours are the cost driver for variable overhead costs.

 

Actual variable overhead costs                                       $5,120

Standard variable overhead costs                  $3.00 per hour

Actual direct labor hours                                        2,000 hours

Standard direct labor hours per unit                          3 hours

Units produced                                                                      1,000

 

What is the variable overhead spending variance?

Select one:
a. $3,880 Favorable
b. $3,880 Unfavorable
c. $1,000 Unfavorable
d. $880 Favorable

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