Kuczenski Corporation's cost formula for its manufacturing overhead is $45,700 per month plus $53 per machine-hour. For the month of March, the company planned for activity of 6,200 machine-hours, but the actual level of activity was 6,150 machine-hours. The actual manufacturing overhead for the month was $373,630.
-The spending variance for manufacturing overhead in March would be closest to:

Question

Quizplus · Accepted Answer

The spending variance is calculated as the difference between the actual overhead and the flexible budget overhead. The flexible budget overhead is $45,700 + ($53 * 6,150) = $372,650. The actual overhead is $373,630. The spending variance is $373,630 - $372,650 = $980 U (unfavorable).

Kuczenski Corporation's Cost Formula for Its Manufacturing Overhead Is $45,700