Evaluate the total factory overhead spending variance

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Reference no: EM135601

Gerhan Company's flexible budget for the units essentially manufactured in May shows $15,640 of total factory overhead; this output level shows 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 shows 90% of available capacity. The company spent 5,000 DLHs and incurred $16,500 of net factory overhead cost during May, adding $6,800 for fixed factory overhead. Under a three-variance breakdown (decomposition) of the net overhead variance, evaluate the total factory overhead spending variance for May.

Reference no: EM135601

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