Robert Company, Which Applies Overhead to Production on the Basis

question 50

Multiple Choice

Robert Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $77,700
Actual machine hours worked: 18,800
Standard variable overhead cost per machine hour: $4.50
If Robert estimates 1.5 hours to manufacture a completed unit, the company's variable-overhead spending variance is:

• A) $3,600 favorable.
• B) $3,600 unfavorable.
• C) $6,900 favorable.
• D) $6,900 unfavorable.
• E) None of the other answers are correct.