Answer the Following Questions Using the Information Below:
Melbourne Corporation

question 146

Multiple Choice

Answer the following questions using the information below:
Melbourne Corporation manufactured 57 000 door jambs during September.The fixed-overhead cost-allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September:
$$\begin{array} { l r r } & \text { Actual } & \text { Static Budget } \\\text { Production } & 57000 \text { units } & 60000 \text { units } \\\text { Machine-hours } & 985 \text { hours } & 1200 \text { hours } \\\text { Fixed overhead costs for September } & \$ 54300 & \$ 60000\end{array}$$
-What is the fixed overhead spending variance?

• A)$4100 unfavourable
• B)$5750 favourable
• C)$5700 favourable
• D)$5750 unfavourable

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Definitions:

Interest Payable

A liability account showing the amount of interest expense that has been incurred but not yet paid.

Nominal Interest Rate

The stated interest rate of an investment or loan without accounting for inflation or compounding interest effects.

Nominal Interest Rate

The stated interest rate on a loan or financial instrument, not accounting for inflation or other factors that affect the real interest rate.

Effective Interest Rate

The actual interest rate on a loan or financial product, reflecting the compounding periods per year.