The following information is available from the Terry Company:

Actual total factory overhead cost incurred$25,000 Actual fixed overhead cost incurred$10,400 Budgeted fixed overhead expenses$11,000 Actual direct labor hours (DLH) worked 4,400 Standard DLHs for this period's production (output) 4,000 Standard variable overhead rate per DLH$3.00 Standard fixed overhead rate per DLH$2.50

What is the total overhead spending variance for Terry Company for the period, to the nearest whole dollar?

$800 unfavorable

1. Total OH spending variance = Actual total OH ? FB for OH, based on inputs (i.e., based on actual DLHs worked during the period).

2. FB for OH, based on inputs = Budgeted fixed OH cost for the period + Budgeted variable OH (based on actual DLHs worked during the period) = $11,000 (given) + [(4,400 DLHs (given) × $3.00/DLH (given))] = $11,000 + $13,200 = $24,200.

3. Therefore, total OH spending variance = $25,000 (given) ? $24,200 (see (2) above) = $800U.

Note: the variance here is unfavorable (U) because actual total spending > budgeted spending (based on the actual DLHs worked during the period).