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A firm uses a standard costing system and allocates variable overhead costs based on direct labor hours. The annual budget projected 1,000 finished units, 10,000 hours of direct labor, and $100,000 of variable overhead costs. At the end of the year, 750 units were completed using 8,000 hours of direct labor and $75,000 in variable overhead. What is the variable overhead spending variance

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Answer:

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Explanation:

Statement showing Computations  

         Paticulars                                                                             Amount

Variable overhead cost per unit =100,000/1,000                   100.00

Standard Variable overhead for 750 Units = 750 * 100             75,000.00

Actual Variable overhead             75,000.00

Variable overhead spending variance= Standard VO - Actual VO  

Variable overhead spending variance= 75,000 - 75,000  

Variable overhead spending variance= 0

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