Zero Company's standard factory overhead rate is $3.82 per direct labor hour (DLH), calculated at 94.00% capacity = 920 standard DLHs. In December, the company operated at 83.00% of capacity, or 812 standard DLHs. Budgeted factory overhead at 83.00% of capacity is $3,270, of which $1,382 is fixed overhead. For December, the actual factory overhead cost was $3,900 for 855 actual DLHs, of which $1,340 was for fixed factory overhead. Under a three-way breakdown (decomposition) of the total overhead variance, what is the total factory overhead spending variance for Zero Company in December? $573 unfavorable N/A this variance doesn't exist under a three-way breakdown of the total overhead variance. $531 unfavorable $162 unfavorable $99 unfavorable

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Chapter1: Financial Statements And Business Decisions
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Zero Company's standard factory overhead rate is $3.82 per
direct labor hour (DLH), calculated at 94.00% capacity = 920
standard DLHs. In December, the company operated at 83.00%
of capacity, or 812 standard DLHs. Budgeted factory overhead at
83.00% of capacity is $3,270, of which $1,382 is fixed overhead.
For December, the actual factory overhead cost was $3,900 for
855 actual DLHs, of which $1,340 was for fixed factory overhead.
Under a three-way breakdown (decomposition) of the total
overhead variance, what is the total factory overhead spending
variance for Zero Company in December?
$573 unfavorable
N/A this variance doesn't exist under a three-way breakdown
of the total overhead variance.
$531 unfavorable
$162 unfavorable
$99 unfavorable
Transcribed Image Text:Zero Company's standard factory overhead rate is $3.82 per direct labor hour (DLH), calculated at 94.00% capacity = 920 standard DLHs. In December, the company operated at 83.00% of capacity, or 812 standard DLHs. Budgeted factory overhead at 83.00% of capacity is $3,270, of which $1,382 is fixed overhead. For December, the actual factory overhead cost was $3,900 for 855 actual DLHs, of which $1,340 was for fixed factory overhead. Under a three-way breakdown (decomposition) of the total overhead variance, what is the total factory overhead spending variance for Zero Company in December? $573 unfavorable N/A this variance doesn't exist under a three-way breakdown of the total overhead variance. $531 unfavorable $162 unfavorable $99 unfavorable
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