Reynolds Manufacturing Company Has the Following Information Pertaining to a Normal

question 42

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 fixed overhead spending variance for Reynolds?

• A)$0
• B)$4,000 (F)
• C)$6,000 (U)
• D)$10,000 (U)

---

Definitions:

Finally Paid

Pertains to a payment or series of payments that concludes an outstanding obligation or debt, leaving no balance.

Encoding Warranties

Guarantees or assurances typically afforded to a product or service, presumed to follow standard encoding or presentation norms.

Commercial Paper

Short-term, unsecured promissory notes issued by corporations to finance their operations.

Transferee

An individual or entity that receives property, rights, or interests from another through a legal transfer.