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12 May, 15:20

Dubberly Corporation's cost formula for its manufacturing overhead is $32,200 per month plus $66 per machine-hour. For the month of March, the company planned for activity of 7,840 machine-hours, but the actual level of activity was 7,770 machine-hours. The actual manufacturing overhead for the month was $573,970.

The spending variance for manufacturing overhead in March would be closest to:

A. 24330 U

B. 24330 F

C. 28950 U

D. 28950 F

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Answers (1)
  1. 12 May, 17:50
    0
    C. $28,950 Unfavorable

    Explanation:

    The calculation of spending variance for manufacturing overhead is given below:-

    Budgeted manufacturing overhead for actual activity = Manufacturing overhead + (Actual level of activity * Machine per hour)

    = $32,200 + (7,770 * $66)

    = $545,020

    Spending variance for manufacturing overhead = Actual Manufacturing overhead for the month - Budgeted manufacturing overhead for actual activity

    = $573,970 - $545,020

    = $28,950 Unfavorable
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