Reynolds Manufacturing Company Has the Following Information Pertaining to a Normal

question 13

Multiple Choice

Reynolds Manufacturing Company has the following information pertaining to a normal monthly 10,000 units. Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.
Standard factory overhead rates per direct labour hour are:
$\begin{array}{ll}\text { Fixed } & \$ 6.00 \\\text { Variable } & 10.00&\$16.00 \\\\\text {Units actually produced in current month}&&\text {9,000 units}\\\\\text {Actual factory overhead costs incurred}\\\text {(includes \( \$ 70,000 \) fixed) }&& \$ 156,000 \\\\\text {Actual direct labour hours}&&\text {9000 hours}\end{array}$
-Refer to the figure.What is the variable overhead spending variance for Reynolds?

• A)$0
• B)$4,000 (F)
• C)$10,000 (F)
• D)$86,000 (U)

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Definitions:

Weight-To-Volume Ratio

A measure that compares the weight of an object to its volume, often used in shipping and material science.

Supply-Chain Management

The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.