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Question - Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour-hours. Each unit requires two standard hours of labour for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at R900,000 for the year, and the fixed overhead rate was R3.00 per unit. The actual data pertaining to the manufacturing overhead for the year are presented below:
Actual production 198,000 units
Actual direct labour-hours 440,000 direct labour-hours
Actual variable overhead R352,000
Actual fixed overhead R575,000
Required - What the Franklin's variable overhead spending variance for the year?
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