Ambo mineral water has produced 5000 units during September 1999. The standard labor time allowed is 2 hours per unit at $15/hour. During the month 8000 hours have been worked at the total cost of $160,000. Variable
factory overhead is applied to products on the basis of direct labor hours. It was estimated that $50,000
variable factory overhead would be incurred. The actual variable factory overhead turned to be $48,000.
Using the above data answer questions 14 & 15.
14. The budgeted variable overhead rate will be
A. $16 per hour
B. $ 5 per hour
C. $30 per hour
D. $10 per hour
E. None of the above.
15. The variable factory overhead Spending variance is
A. 8,000 U
B. 10,000 F
C. 10,000 U
D. 8,000 F
E. None of the above