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A Manufacturing Company Has a Standard Costing System Based on Direct

Question 37

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A manufacturing company has a standard costing system based on direct labour-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:  Denominator level of activity 3,700 DLHs  Overhead costs at the denominator activity level:  Variable overhead cost £28,490 Fixed owerhead cost £47,545 The following data pertain to operations for the most recent period: Actual hours 3,900 DLHs  Standard hours 3,900allowed for the actual output 3,850 DLHs  Actual total variable overhead cost £29,445Actual total fixed overhead cost £47,995\begin{array}{lrr} \text { Denominator level of activity } &3,700&\text { DLHs }\\ \text { Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &£ 28,490\\ \text { Fixed owerhead cost } &£ 47,545\\ \text { The following data pertain to operations for the most recent period:} &\\ \text { Actual hours } &3,900&\text { DLHs }\\ \text { Standard hours 3,900allowed for the actual output } &3,850&\text { DLHs }\\ \text { Actual total variable overhead cost } &£ 29,445\\ \text {Actual total fixed overhead cost } &£47,995 \\\end{array}


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What was the variable overhead spending variance for the period to the nearest pound


A) £585 U
B) £585 F
C) £955 U
D) £955 F

Correct Answer:

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