Question
Absolute Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Absolute expected to incur
Absolute Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Absolute expected to incur the following:
800 machine hours per month (80connectors x 10 machine hours per connector) |
$5,000 in variable manufacturing overhead costs |
$9,450 in fixed manufacturing overhead costs |
During August, Absolute actually used 750 machine hours to make 120 connectors and spent $ 5,100 in variable manufacturing costs and $ 8,000 in fixed manufacturing overhead costs. Calculate the variable overhead cost variance for Absolute.
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