Skizone Company\'s 4minusVariance Analysis: Spending Variance Efficiency Varianc
ID: 2570285 • Letter: S
Question
Skizone Company's
4minusVariance
Analysis:
Spending Variance
Efficiency Variance
ProductionminusVolume
Variable overhead
$7,600
$14,000
No variance
Fixed overhead
(a)
No variance
$ 47 comma 000$47,000
If Skizone's combined
4minusVariance
Analysis shows an unfavorable spending variance of $2,600, what is the fixed overhead spending variance (a)?
A.
$10,200favorable
B.
$5,000unfavorable
C.
$5,000favorable
D.
$10,200unfavorable
Spending Variance
Efficiency Variance
ProductionminusVolume
VarianceVariable overhead
$7,600
$14,000
UNo variance
Fixed overhead
(a)
No variance
$ 47 comma 000$47,000
UExplanation / Answer
Fixed overhead spending variance = Combined spending variance - Variable overhead Spending Variance
= $2,600 unfavorable - $7,600 Favarable = $10,200 unfavorable (ie option D)
Note for undertanding :
The formula given above is extracted from the logic Total Cost = Variable Cost + Fixed Cost.
Similarly Combined Cost spending variance = Variable overhead Spending Variance + Fixed overhead spending variance.
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