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Pearce Company Pearce Company Uses a Standard Cost System for Its Production

Question 176

Multiple Choice

Pearce Company
Pearce Company uses a standard cost system for its production process.Pearce Company applies overhead based on direct labor hours.The following information is available for July:

 Standard:  
 DLH per unit 2.20
 Variable overhead per DLH    $2.50
 Fixed overhead per DLH  
 Budgeted variable overhead $3.00
(based on 11,990 DLHs)  
 Actual:  
Units produced  4,400
 Direct labor hours   8,800
 Variable overhead $29,950
 Fixed overhead $42,300

Refer to Pearce Company Using the four-variance approach,what is the variable overhead spending variance?


A) $ 7,950 U
B) $ 25 F
C) $ 7,975 U
D) $10,590 U

Correct Answer:

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