Megan,Incuses the Following Standard Costs Per Unit for One of Its

question 1

Multiple Choice

Megan,Inc.uses the following standard costs per unit for one of its products: Direct labor (2 hrs @ $5/hr) = $10;overhead (2 hrs @ $2.50/hr) = $5.The flexible budget for overhead is $120,000 plus $1 per direct labor hour (DLH) .Actual data for the month show total overhead costs of $225,000,total fixed overhead of $123,000,85,000 hours worked,and 40,000 units produced.The variable overhead spending variance is:

• A)$0.
• B)$3,000 unfavorable.
• C)$5,000 unfavorable.
• D)$17,000 unfavorable.
• E)$25,000 unfavorable.

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