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:
1000 machine hours per month (100 connectors *10 machine hours per connector)
$8,500 in variable manufacturing overhead costs
$8115 in fixed manufacturing overhead costs
During August, Absolute actually used 600 machine hours to make 80 connectors and spent $5700 in variable manufacturing costs and $9600 in fixed manufacturing overhead costs. Calculate the variable overhead spending variance for Absolute.
a. $600 U
b. $1,100 F
c. $1,700 F
d. $2,300 F
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