Answer (C) is correct . Three-way analysis of variance combines the fixed overhead budget (spending) and variable overhead spending variances of four-way analysis of variance. It includes spending, efficiency, and volume variances. The spending variance is the difference between the actual overhead incurred and the budgeted overhead for the actual input. Budgeted overhead [$10,500 + (5,250 ¡Á $3.80)] $?30,450 Actual overhead (22,500) $???7,950 FAnswer (A) is incorrect because The amount of $9,660 is based on standard, not actual, hours.
Answer (B) is incorrect because Using actual fixed overhead to calculate budgeted overhead results in $8,250.
Answer (D) is incorrect because The spending variance is favorable.
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What is the spending variance assuming Coleman uses a three-way analysis of overhead?
