Reference no: EM132803762
Question - Wendy Wall (WW) makes wall units. For the year, the following details have been budgeted. Output, 10,000 units; factory overheads $1,250,000, of which 60% is variable. Each wall unit should take 2.5 hours of direct labor to produce. WW produced 9,500 units with 24,000 DLH used and $1,175,000 actual overhead was incurred. Overhead is allocated based on direct labor hours (DLH). What is true of Wendy's overhead variances?
a. Overhead spending variance is $45,000 fav
b. Overhead efficiency variance is $7,500 fav
c. Overhead volume variance is $25,000 fav
d. Overhead spending variance is $37,500 fav
e. None of the above
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