Clark Company’s master budget includes $252,000 for equipment depreciation. The master budget was prepared for an annual volume of 50,400 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 4,000 chargeable hours and recorded $19,500 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.) 3. Calculate the fixed overhead production volume variance for depreciation expense in September. Was this variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.)
Clark Company’s master budget includes $252,000 for equipment depreciation. The master budget was prepared for an annual volume of 50,400 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 4,000 chargeable hours and recorded $19,500 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.) 3. Calculate the fixed overhead production volume variance for depreciation expense in September. Was this variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Clark Company’s master budget includes $252,000 for equipment depreciation . The master budget was prepared for an annual volume of 50,400 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 4,000 chargeable hours and recorded $19,500 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.) 3. Calculate the fixed overhead production volume variance for depreciation expense in September. Was this variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.)
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