When machine-hours are used as an overhead cost-allocation base, and the unexpected purchase of a new machine results in fewer expenditures

ACCOUNTING

Multiple Choice

When machine-hours are used as an overhead cost-allocation base, and the unexpected purchase of a new machine results in fewer expenditures for machine maintenance, the MOST likely result would be to report

a. a favorable variable overhead spending variance

b. an unfavorable variable overhead efficiency variance

c. a favorable fixed overhead flexible-budget variance

d. an unfavorable production-volume variance

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