The Following Information Is Available from the Terry Company What Is the Total Overhead Spending Variance for Terry Company

question 36

Multiple Choice

The following information is available from the Terry Company: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 25,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,400 \\\text { Budgeted fixed overhead expenses } & \$ 11,000 \\\text { Actual direct labor hours (DLH) worked } & 4,400 \\\text { Standard DLHs for this period's production (output) } & 4,000 \\\text { Standard variable overhead rate per DLH } & \$ 3.00 \\\text { Standard fixed overhead rate per DLH } & \$ 2.50\end{array}$ What is the total overhead spending variance for Terry Company for the period, to the nearest whole dollar?

• A) $800 unfavorable.
• B) $1,000 unfavorable.
• C) $1,200 unfavorable.
• D) $1,400 unfavorable.
• E) $2,000 unfavorable.

---

Definitions:

Balance Sheet

A financial statement that displays a company's financial position at a specific point in time, showing assets, liabilities, and equity.

Assets

Resources owned by a company that have economic value and can provide future benefits, such as cash, inventory, and property.

Deferred Revenue

Income a company has received for its products or services but has not yet earned, often considered a liability until the service is provided or product delivered.

Adjusted Trial Balance

a listing of all company accounts that will appear in the financial statements after adjustments have been made for errors, omissions, and accruals.