Russo Corporation manufactured 20,000 air conditioners during November. The overhead cost-allocation base is $30.50 per machine-hour. The following variable overhead data pertain to November Actual 20,000 units 17,300 hours $30.00 Production Machine-hours Variable overhead cost per machine-hour What is the variable overhead spending variance? Budgeted 23,000 units 18,400 hours $30.50
Russo Corporation manufactured 20,000 air conditioners during November. The overhead cost-allocation base is $30.50 per machine-hour. The following variable overhead data pertain to November Actual 20,000 units 17,300 hours $30.00 Production Machine-hours Variable overhead cost per machine-hour What is the variable overhead spending variance? Budgeted 23,000 units 18,400 hours $30.50
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:Russo Corporation manufactured 20,000 air conditioners during November. The overhead cost-allocation base is $30.50 per machine-hour. The following variable overhead data pertain to November:
Actual
20,000 units
17,300 hours
$30.00
Production
Machine-hours
Variable overhead cost per machine-hour
What is the variable overhead spending variance?
O A. $8,650.00 favorable
OB. $9,200.00 favorable
O C. $9,200.00 unfavorable
O D. $8,650.00 unfavorable
Budgeted
23,000 units
18,400 hours
$30.50
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