Frekko Company Collected the Following Information -Refer to the Figure

question 39

Multiple Choice

Frekko Company collected the following information:
$\begin{array}{lr}\text { Standard costs per unit: }\\\text { Variable overhead } & 4 \text { machine hours @\$6 per machine hour } \\\text { Fixed overhead } & 4 \text { machine hours } @ \$ 10 \text { per machine hour }\end{array}$


$\begin{array}{l}\text { Actual output }&20,000 \text { units } \\\text { Denominator (normal capacity) output } & 21,000 \text { units } \\\text { Actual machine hours } & 79,000 \text { machine hours } \\\text { Actual variable overhead cost } & \$ 540,000 \\\text { Actual fixed overhead cost } & \$ 810,000\end{array}$
-Refer to the figure.Using the three variance method,what is the spending variance?

• A)$30,000 (F)
• B)$30,000 (U)
• C)$36,000 (F)
• D)$36,000 (U)

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Definitions:

Rush Orders

Orders that are given priority over others, typically requiring faster production and delivery times at potentially higher costs.

Uneconomical Lot-Sizes

Lot-sizes that do not maximize efficiency or cost-effectiveness in production or ordering.

Service Company

A business entity that provides intangible products or services to customers rather than physical goods.

Fixed And Variable Cost

Fixed and Variable Cost are two types of costs incurred by businesses; fixed costs do not change with the level of production or service, while variable costs vary directly with the level of production or service.