Answer the following questions using the information below:
PlasticsRus Pty Ltd manufactured 100 000 buckets during February.The overhead cost-allocation base is $5.00 per machine-hour.The following variable overhead data pertain to February:
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Production } & 100000 \text { units } & 100000 \text { units } \
\text { Machine-hours } & 9800 \text { hours } & 10000 \text { hours } \
\text { Variable overhead cost per machine-hour } & \$ 5.25 & \$ 5.00
\end{array}$$
-What is the variable overhead spending variance?
A)$1000 favourable
B)$1450 unfavourable
C)$2450 unfavourable
D)None of these answers are correct.

Question

Answer the following questions using the information below:
PlasticsRus Pty Ltd manufactured 100 000 buckets during February.The overhead cost-allocation base is $5.00 per machine-hour.The following variable overhead data pertain to February:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 100000 \text { units } & 100000 \text { units } \
\text { Machine-hours } & 9800 \text { hours } & 10000 \text { hours } \
\text { Variable overhead cost per machine-hour } & \$ 5.25 & \$ 5.00
\end{array}$$
-What is the variable overhead spending variance?
A)$1000 favourable
B)$1450 unfavourable
C)$2450 unfavourable
D)None of these answers are correct.

Quizplus · Accepted Answer

The variable overhead spending variance is:
Actual variable overhead cost - (Actual machine hours x Variable overhead rate per machine hour) 
= $74,550 - (16,500 x $5) 
= $74,550 - $82,500 
= $7,950 unfavourable 
Therefore, the best choice is C ($2,450 unfavourable).

Answer the Following Questions Using the Information Below: PlasticsRus Pty

Answer the Following Questions Using the Information Below:
PlasticsRus Pty