Fletcher Company Collected the Following Data Regarding Production of One

Multiple Choice

Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance. $\begin{array}{lll}\text { Direct labor stendard (2 hrs. @ } \$ 12.75 / \mathrm{hr} \text {.) } & \$ 25.50 &\text {per finished unit}\\\text { Actual direct labor hours } & 81,500&\text { hrs}\\\text { Budgeted units } & 42,000&\text {units}\\\text {Actual finished units produced}&40,000&\text {units}\\\text {Standad variable OH rate (2 hrs. @ \$14.30/hr) }&\$28.60&\text {per finished unit}\\\text {Standard fixed OH rate \( (\$ 336,000 / 42,000 \) units) }&\$8.00 &\text {per unit}\\\text {Actual cost of variable overhead costs incurred}&\$1,140,000\\\text {Actual cost of fixed overhead costs incurred} &\$ 338,000 \end{array}$

A) $4,000 favorable.
B) $21,450 favorable.
C) $4,000 unfavorable.
D) $21,450 unfavorable..
E) $25,450 favorable.