ABC Corporation manufactured 21,000 air conditioners during November. Direct materials cost of 21,000 air conditioners...
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ABC Corporation manufactured 21,000 air conditioners during November. Direct materials cost of 21,000 air conditioners is $700,000 and direct manufacturing labor cost incurred is $750,000. The manufacturing overhead costallocation base is $34.25 per machine-hour. The following variable overhead data pertain to November: Actual - Production: 21,000 units - Machine-hours: 13,300 hours - Variable overhead cost per machine-hour: $34.00 Budgeted - Production: 24,000 units - Machine-hours: 14,400 hours - Variable overhead cost per machine-hour: $34.25 What is the effect of the variable overhead spending variance on gross profit? gross proft is increased by $3,325 gross profit is increased by $2,750 gross proft is decreased by $2.750 gross proft is decreased by $5,250 gross profit is decreased by $3,325 gross profit is increased by $5,250
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