Al's Wooden Turnings' dreidel division expected to use 0.20 direct labor hours to produce one unit of product. The variable overhead standard rate is $3.50 per hour. Actual results for last year have been prepared and indicate 390,000 dreidels were produced and sold. The company's direct labor workforce worked 97,500 hours, and variable overhead costs totaled $360,000. Calculate the variable overhead spending variance. Is it favorable or unfavorable and why?

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SOLUTION To calculate the variable overhead spending variance we need to calculate the expected vari... View the full answer