Hyland Enterprises produces widgets. Budgeted production is 260,000 units
per month, and the standard direct labor requirement to make this amount of
widgets is 4,000 hours. All overhead is allocated based on direct labor hours.
The following information is available:
Budgeted
Actual
Amounts
Results
Production in units
260,000
320,000
Total labor hours
4,000
5,000
Total variable overhead
$11,000
$13,500
Total fixed overhead
$5,000
$5,500
Total overhead
$16,000
$19,000
The overhead spending variance for the month in question was: