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Question(s) / Instruction(s):

Abbott has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow.

Actual units produced: 42,000

Actual machine hours worked: 120,000

Actual variable overhead incurred: $520,000

 Abbott's variable-overhead spending variance is:

a)            $20,000 favorable.

b)            $20,000 unfavorable.

c)            $27,000 favorable.

d)            $27,000 unfavorable.

e)            not listed above.

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