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Gerhan Company's flexible budget for the units actually manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company spent 5,000 DLHs and incurred $16,500 of total factory overhead cost during May, including $6,800 for fixed factory overhead. Under a three-variance breakdown (decomposition) of the total overhead variance, what is the total factory overhead spending variance for May?

N/A-this variance does not exist in a three-variance analysis of the total overhead variance.

a) $300 favorable.

b) $380 unfavorable.

c) $480 unfavorable.

d) $1,160 unfavorable.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M943649

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