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    The answer to Variable overhead spending variance

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    The following standards for variable manufacturing overhead have been established for a company that makes only 1 product:

    standard hours per unit of output 2.8 hours
    standard variable overhead rate $16.30 per hour

    The following data pertain to operations for the last month:

    Actual hours 7,600
    Actual total variable overhead cost $127,300
    Actual output 2,500 units

    What is the variable overhead spending variance for the month?

    A 3420 U
    B 3150 F
    C 10,050 U
    D 13,200 U

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    Solution Summary

    The solution explains how to calculate the variable overhead spending variance