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    Variable Overhead spending variance

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    June Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month:

    Budgeted level of activity 7,400 MHs
    Actual level of activity 7,500 MHs
    Cost formula for variable overhead cost $5.90 per MH
    Budgeted fixed overhead cost $60,000
    Actual total variable overhead $42,750
    Actual total fixed overhead $ 61,000

    What was the variable overhead spending variance for the month?

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    Solution Summary

    The solution explains how to calculate June's Corporation variable overhead spending variance for the month.