question archive Bat Company's flexible budget for the units manufactured in May shows $15,800 of total factory overhead; this output level represents 70% of available capacity
Bat Company's flexible budget for the units manufactured in May shows $15,800 of total factory overhead; this output level represents 70% of available capacity
Subject:AccountingPrice: Bought3
Bat Company's flexible budget for the units manufactured in May shows $15,800 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 per direct labor hour (DLH), based on a denominator volume level of 5,940 DLHs, which represents 90% of available capacity. The company used 6,000 DLHs and incurred $16,400 of total factory overhead cost during May, including $7,700 for fixed factory overhead.
What is the variable factory overhead spending variance (to the nearest whole dollar) in May, assuming Bat uses a four-variance breakdown (decomposition) of the total overhead variance? (Round your intermediate calculation to 2 decimal places.) PLEASE SHOW ALL WORK AND STEPS
Multiple Choice
A. $560 unfavorable.
B. $480 favorable.
C. N/A—this variance is not defined under the four-way breakdown of the total OVH variance.
D. $660 unfavorable.
E. $360 unfavorable.
