Underfoot Products Uses Standard Costing Compute the Variable Overhead Spending Variance

question 8

Multiple Choice

Underfoot Products uses standard costing. The following information about overhead was generated during May: $\begin{array}{ll}\text { Standard variable overheadrate } & \$ 2 \text { per machine hour } \\\text { Standard fixed overhead rate } & \$ 1 \text { per machine hour } \\\text { Actual variable overhead costs } & \$ 389,000 \\\text { Actual fixed overhead costs } & \$ 175,000 \\\text { Budgeted fixed overhead costs } & \$ 190,000 \\\text { Standard machine hours per urit produced } & 10 \\\text { Good urits prochuced } & 18,000 \\\text { Actual machine hours } & 200,000\end{array}$
Compute the variable overhead spending variance.

• A) $11,000 (F)
• B) $11,000 (U)
• C) $31,000 (F)
• D) $41,000 (F)

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Definitions:

Mutual Agreement

A consensus reached by two or more parties, often formalized in a contract, where all involved have a shared understanding and acceptance of the terms.

Replacement Workers

Individuals who are hired to substitute for striking or locked-out employees during labor disputes.

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The various aspects of a job that an employee agrees to when they accept employment, including salary, hours, and work environment.