Isometric Foundation Materials Company Is Calculating the Variable Overhead Spending

question 56

Multiple Choice

Isometric Foundation Materials Company is calculating the variable overhead spending variance due to a difference in the actual variable overhead cost per unit of their cost per unit allocation base and the budgeted variable overhead cost per unit.Operational management had budgeted for a $65 variable overhead cost per unit but now find that the actual cost per unit of the allocation base is $60 per unit.The actual quantity of machine hours used was 5,500.
Required
Compute the variable overhead spending for IFMC and indicate whether it is a favorable,F,or unfavorable,U,variance.

• A)$27,500 U
• B)$17,500 U
• C)$27,500 F
• D)$7,500 F
• E)$17,500 F

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