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Managerial Accounting

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Moderate

Overhead Spending for Printers

MGRACT-ZWJFD4

Saigon Corp manufactures printers for sale to retail businesses. The standard number of hours required to manufacture a shipment of printers is 1200 direct labor hours. Saigon uses direct labor hours to charge variable manufacturing overhead. The variable overhead rate is \$28.50 per hour. The actual hours incurred were 1275 and the actual variable overhead incurred \$35,827.50.

What is the variable overhead manufacturing spending variance?

A

$510 Favorable

B

$1,627.50 Unfavorable

C

$1,627.50 Favorable

D

$2,137.50 Unfavorable