QRS Limited Uses a Standard Costing System for All Its

Multiple Choice

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product E. The standard machine hours for each unit of Product E are 3½ hours. Variable overhead is incurred by each Product E at the rate of £8 per machine hour. Budgeted production of Product E is 3,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,300 units of Product E. Total machine hours for the year were 11,800 and the variable overhead paid in the year was £95,000. What is the variable overhead expenditure variance for Product E for the financial year ended 31 October 2019?

A) £600 Unfavourable
B) £2,000 Unfavourable
C) £2,600 Unfavourable
D) £8,400 Unfavourable