Tyro Company Has a Standard Cost System That Applies Manufacturing

question 59

Multiple Choice

Tyro Company has a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours (DLHs) .The following information is available:
$\begin{array}{|l|r|}\hline \text { Actual Total Overhead Costs } & \$ 15,000 \\\hline \text { Actual Fixed Overhead Costs } & \$ 7,200 \\\hline \text { Budgeted Fixed Overhead Costs } & \$ 7,000 \\\hline \text { Actual Hours Worked } & 3,500 \text { DLHs } \\\hline \text { Standard Hours Allowed for the Output } & 3,800 \text { DLHs } \\\hline \text { Variable Overhead Rate } & \$ 2.50 \text { per DLH } \\\hline\end{array}$
Based on these data,what was the variable overhead spending variance?

• A) $750 unfavourable.
• B) $950 favourable.
• C) $1,500 unfavourable.
• D) $1,700 favourable.

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