C is corrent. The requirement is to calculate the variable overhead spending variance for product A. C is corrent because the variable overhead spending variance is calculated by multiplying the difference between the actual overhead rate and the standard overhead rate by the actual hours. In this case, the variable overhead spending variance is equal to $2,250 unfavorable [($8.00 – $7.50) × 4,500 hours]. A is incorrect. The variable overhead spending variance is equal to the difference between the actual overhead rate and the standard overhead rate multiplied by the actual hours. A is incorrect. The variable overhead spending variance is equal to the difference between the actual overhead rate and the standard overhead rate multiplied by the actual hours. D is incorrect. The variable overhead spending variance is equal to the difference between the actual overhead rate and the standard overhead rate multiplied by the acutal hours.
