Clark Company\'s master budget includes $360,000 for equipment depreciation. The

Question

Clark Company's master budget includes $360,000 for equipment depreciation. The master budget was prepared for an annual volume of 120,000 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 9,000 chargeable hours, and the firm recorded $28,000 of depreciation expense. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. Flexible-budget amount 2. Compute the spending variance for the depreciation expense on equipment. Spending variance-equipment depreciation Favorable

Explanation / Answer

Flexible -Budget amount 30000 Spending variance -Equipment depreciation 2,000 Favourable

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