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Variable overhead spending variance

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

Standard hours per unit of output 3.2 hours
Standard variable overhead rate $12.70 per hour

The following data pertain to operations for the last month:

Actual hours 1,600 hours
Actual total variable overhead cost $19,600
Actual output 400 units

Reference: 10-14

What is the variable overhead spending variance for the month?

$720 U
$3,344 U
$720 F
$3,344 F

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This provides the steps to calculate the variable overhead spending variance.

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