At 60,000 Machine Hours,Clark Company's Static Budget for Variable Overhead

question 71

Multiple Choice

At 60,000 machine hours,Clark Company's static budget for variable overhead costs is $180,000.At 60,000 machine hours,the company's static budget for fixed overhead costs is $300,000.Machine hours are the cost driver of all overhead costs.The static budget is based on 60,000 machine hours.At 60,000 machine hours,the company produces 40,000 units.The following data is available:
$\begin{array} { l } \text {Actual units produced and sold }&42,000 \\ \text {Actual machine hours }&64,000 \\ \text {Actual variable overhead costs }& \$185,600\\ \text {Actual fixed overhead costs }&\$302,400 \\\end{array}$

What is the fixed overhead spending variance?

• A) $2,400 Unfavorable
• B) $2,400 Favorable
• C) $1,000 Favorable
• D) $1,000 Unfavorable

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