Refer to Figure 7. The variable overhead spending variance would be (assume the firm uses direct labor hours as the basis of VOH application)

$1,200 favorable

$400 favorable

$200 favorable

$2,000 favorable

None of these answers

Refer to Figure 7. The fixed overhead spending variance would be

$2,500 favorable $2,500 unfavorable None of these are correct

$1,000 unfavorable

$1,000 favorable

Figure 7 Budgeted fixed overhead for the year Budgeted direct labor hours for the year Actual fixed overhead for August Actual variable overhead for August Direct labor hours worked in August Standard variable overhead cost per direct labor hour Standard direct labor hours allowed for August production $300,000 30,000 $24,000 $10,000 2,600 $4 2,750