Answer Happy

Reed Company applies manufacturing overhead costs to products on the basis of direct labour-hours. The standard cost card shows that 6 direct labour-hours are required per unit of product. For August, the company budgeted to work 180,000 direct labour-hours and to incur the following total manufacturing overhead costs: Total variable overhead costs $198,000 $237,600 Total fixed overhead costs During August, the company completed 28,000 units of product, worked 172,000 direct labour-hours, and incurred the following total manufacturing overhead costs: Total variable overhead costs. Total fixed overhead costs $197,800 $230,600 The denominator activity in the predetermined overhead rate is 180,000 direct labour-hours. The variable overhead spending variance for August is: Multiple Choice $8,600 F $8,600 U $13,000 F $13,000 U