Answer Happy

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: $2 per direct labour hour Fixed overhead application rate: $5 per direct labour hour The company also had the following actuals: Production: 12,000 units Variable overhead: $48,760 Fixed overhead: $125,350 Total direct labour hours: 23,000 What is the variable overhead spending variance? O a) $2,760 favourable Ob) $2,760 unfavourable c) $760 unfavourable d) $760 favourable