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Managerial Accounting

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Analyzing Cost Variances for Chairs

MGRACT-9MZG1G

Ethan Corp manufactures rattan chairs for sale to retail businesses. The standard number of hours required to manufacture a shipment of chairs is 450 hours. The standard wage rate is \$18.50 per hour. The actual hours incurred were 465 and the actual labor wages incurred \$8,625.75.

What is the spending variance?

A

$23.25 Favorable

B

$300.75 Unfavorable

C

$23.25 Unfavorable

D

$277.50 Unfavorable