Welcome to the article Calculate the spending variance for variable overhead setup costs 1 2 313 favorable 2 2 313 unfavorable 3 682 favorable 4 682 unfavorable. On this page, you will learn the essential and logical steps to better understand the topic being discussed. We hope the information provided helps you gain valuable insights and is easy to follow. Let’s begin the discussion!
Answer :
The spending variance for variable overhead setup costs requires subtracting the budgeted cost from the actual cost. The given HPM example shows a spending variance of 3.8% unfavorable due to higher actual spending than what was budgeted. However, without specific figures, we cannot determine the correct option from the ones provided.
The correct option is none of these.
The subject of the question relates to variance analysis, a crucial aspect of managerial accounting that involves comparing actual costs to budgeted costs. The question asks for the calculation of the spending variance for variable overhead related to setup costs. To calculate a variance, you need to subtract the budgeted amount from the actual amount. If the actual amount is higher, the variance is unfavorable. If the actual amount is lower, the variance is favorable.
Given the hypothetical budgeted amount for the HPM program was $759,000 and the actual spending was $789,000, this results in a total variance of $30,000 ($789,000 - $759,000) which is unfavorable because the actual spending exceeded the budgeted amount. In percentage terms, this would be a spending variance of 3.8% unfavorable.
It's important to note that the options provided for the spending variance amount in the question do not correlate with the given example of the HPM program's variance. Therefore, the exact variance cannot be determined without the specific budgeted and actual amounts for the overhead setup costs in question.
The correct option is none of these.
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Rewritten by : Brahmana