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Question - H&B Inc. uses a standard cost system and calculates their application rates using direct labour hours.
This year the company had the following standards:
Standard direct labour hours per unit: 2 hours
Variable overhead application rate: $4 per direct labour hour
Fixed overhead application rate: $6 per direct labour hour
The company also had the following actuals:
Production: 16,000 units
Variable overhead: $141,312
Fixed overhead: $203,136
Total direct labour hours: 36,800
What is the fixed overhead spending variance?
a) $17,664 unfavourable
b) $17,664 favourable
c) $11,136 favourable
d) $11,136 unfavourable
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