Question
Clark Companys master budget includes $264,000 for equipment depreciation. The master budget was prepared for an annual volume of 44,000 chargeable hours. This volume is
Clark Companys master budget includes $264,000 for equipment depreciation. The master budget was prepared for an annual volume of 44,000 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 4,500 chargeable hours, and the firm recorded $23,100 of depreciation expense.
1. Determine the flexible-budget amount for equipment depreciation in September.
2. Compute the spending variance for the depreciation expense on equipment.
3. Calculate the fixed overhead production volume variance for the depreciation expense.
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