Answer:
Manufacturing overhead rate(spending) variance= $24,000 favorable
Explanation:
Giving the following information:
Actual direct labor hours= 24,000
Octagon produced 8,000 units and incurred a variable overhead of $120,000.
The hours allowed per unit are 2. The standard variable overhead rate is $3.00 per direct labor hour.
To calculate the variable overhead spending variance, we need to use the following formula:
Manufacturing overhead rate(spending) variance= (standard rate - actual rate)* actual quantity
Actual rate= 120,000/24,000= 5
Manufacturing overhead rate variance= (6 - 5)*24,000
Manufacturing overhead rate variance= $24,000 favorable
