Question
Frekko Company collected the following information: Standard costs per unit: Variable overhead 4 machine hours @ $6 per machine hour Fixed overhead 4 machine hours
Frekko Company collected the following information:
Standard costs per unit:
Variable overhead 4 machine hours @ $6 per machine hour
Fixed overhead 4 machine hours @ $10 per machine hour
Actual output 20,000 units
Denominator (normal capacity) output 21,000 units
Actual machine hours 79,000 machine hours
Actual variable overhead cost $540,000
Actual fixed overhead cost $810,000
Using the three variance method, what is the spending variance?
Answer
a.$36,000 (U)
b.$30,000 (U)
c.$36,000 (F)
d.$30,000 (F)
I know the answer is A but have no idea on how to get it. Can you please help with the formula and calculation
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