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Assume the following information appears in the standard cost card for a company that makes only one product:
| | Standard Quantity or Hours | Standard Price or Rate | Standard Cost |
| Direct materials | 5 | pounds | $ 11.00 | per pound | $ 55.00 |
| Direct labor | 2 | hours | $ 17.00 | per hour | $ 34.00 |
| Variable manufacturing overhead | 2 | hours | $ 3.00 | per hour | $ 6.00 |
During the most recent period, the following additional information was available:
- 20,000 pounds of material was purchased at a cost of $10.50 per pound.
- All of the material that was purchased was used to produce 3,900 units.
- 8,000 direct labor-hours were recorded at a total cost of $132,000.
- The actual variable overhead cost incurred during the period was $25,000.
Assuming the company uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead spending variance?
Multiple Choice
$1,600 F
$1,600 U
$1,000 U
$1,000 F
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