Simmons Company Has the Following Information Available for Variable Overhead

question 140

Multiple Choice

Simmons Company has the following information available for variable overhead costs.Direct labor hours are the cost driver for variable overhead costs.
$\begin{array}{ll}\text { Actual variable overhead costs } & \$ 4,700 \\\text { Standard variable overhead costs } & \$ 1.20 \text { per hour } \\\text { Actual direct labor hours } & 3,750 \text { hours } \\\text { Standard direct labor hours per unit } & 5 \text { hours } \\\text { Units produced } & 700\end{array}$
What is the variable overhead spending variance?

• A) $200 Favorable
• B) $200 Unfavorable
• C) $500 Favorable
• D) $500 Unfavorable

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Definitions:

Broad Purpose

A wide-ranging or general aim that an organization or individual seeks to achieve, often encompassing various specific objectives.

Goods

Tangible products that are produced, bought, or sold, thereby contributing to an economy's exchange of value.

Services

Activities or benefits provided by one party to another which are intangible and do not result in ownership.

Employment Patterns

The trends or general tendencies in how people are employed, including permanency, sectors of employment, work hours, and conditions.