Answer the Following Questions Using the Information Below:
Roberson Corporation

question 110

Multiple Choice

Answer the following questions using the information below:
Roberson Corporation manufactured 30,000 ice chests during September. The variable overhead cost-allocation base is $11.25 per machine-hour. The following variable overhead data pertain to September:
$\begin{array}{lrr}&\text { Actual } &\text { Budgeted }\\\text { Production } & 30,000 \text { units } & 24,000 \text { units } \\\text { Machine-hours } & 15,000 \text { hours } & 10,800 \text { hours } \\\text { Variable overhead cost per machine-hour: } & \$ 11.00 & \$ 11.25\end{array}$
-What is the variable overhead spending variance?

• A) $3,750 favorable
• B) $16,875 unfavorable
• C) $13,125 unfavorable
• D) $30,375 unfavorable

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Definitions:

Negotiable Instrument

A financial document, such as a check or promissory note, that contains an unconditional promise or order to pay a specified amount of money, easily transferable from one party to another.

Acknowledges The Debt

The act of a debtor formally admitting the existence or validity of a debt owed to a creditor.

Promise To Pay

A legal agreement where one party agrees to repay a debt or fulfill an obligation to another party.

Negotiability

The characteristic of a financial tool that permits its transfer or assignment from one entity to another in return for value.