A company allocates overhead on direct labor hours (SLH), using a standard amount of 2 DLH per unit produced. It's standard overhead rte is $15 per DLH. The company produced 5,400 units this period, and its flexible budget at that activity level shows $63,600 in fixed overhead costs and $97,200 in variable overhead costs. Compute the effect variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance

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To compute the overhead spending variance also known as the overhead cost variance or simply the overhead variance well first calculate the flexible b... View the full answer