Robert Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $77,700
Actual machine hours worked: 18,800
Standard variable overhead cost per machine hour: $4.50
If Robert estimates 1.5 hours to manufacture a completed unit, the company's variable-overhead spending variance is:
A) $3,600 favorable.
B) $3,600 unfavorable.
C) $6,900 favorable.
D) $6,900 unfavorable.
E) None of the other answers are correct.

Question

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The Answer of Robert Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $77,700
Actual machine hours worked: 18,800
Standard variable overhead cost per machine hour: $4.50
If Robert estimates 1.5 hours to manufacture a completed unit, the company's variable-overhead spending variance is:
A) $3,600 favorable.
B) $3,600 unfavorable.
C) $6,900 favorable.
D) $6,900 unfavorable.
E) None of the other answers are correct.

Robert Company, Which Applies Overhead to Production on the Basis