18) Orlando 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 Orlando 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 favoralle. D) $6,900 unfavorable. E) None of the answers is correct.
18) Orlando 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 Orlando 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 favoralle. D) $6,900 unfavorable. E) None of the answers is correct.
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:18) Orlando 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 Orlando 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 favoralle.
D) $6,900 unfavorable.
E) None of the answers is correct.
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