Answer the following questions using the information below:
Wagga Wagga Corporation manufactured 30 000 eskies during September.The overhead cost-allocation base is $12.50 per machine-hour.The following variable overhead data pertain to September:
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Production } & 30000 \text { units } & 24000 \text { units } \
\text { Machine-hours } & 15000 \text { hours } & 10800 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 12.00 & \$ 12.50
\end{array}$$
-What is the variable overhead spending variance?
A)$7500 favourable
B)$13 125 unfavourable
C)$16 875 unfavourable
D)$30 375 unfavourable

Question

Answer the following questions using the information below:
Wagga Wagga Corporation manufactured 30 000 eskies during September.The overhead cost-allocation base is $12.50 per machine-hour.The following variable overhead data pertain to September:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 30000 \text { units } & 24000 \text { units } \
\text { Machine-hours } & 15000 \text { hours } & 10800 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 12.00 & \$ 12.50
\end{array}$$
-What is the variable overhead spending variance?
A)$7500 favourable
B)$13 125 unfavourable
C)$16 875 unfavourable
D)$30 375 unfavourable

Quizplus · Accepted Answer

The variable overhead spending variance is calculated as follows:Variable overhead spending variance = (Actual machine-hours x Actual variable overhead cost per machine-hour) - (Budgeted machine-hours x Budgeted variable overhead cost per machine-hour)= (15000 hours x $12.00) - (10800 hours x $12.50)= $180,000 - $135,000= $45,000 favourable

Answer the Following Questions Using the Information Below: Wagga Wagga

Answer the Following Questions Using the Information Below:
Wagga Wagga