Final answer:
The spending variance for Dubberly Corporation's manufacturing overhead in March is calculated by comparing the actual overhead cost to the budgeted cost based on actual activity. The correct calculation shows a spending variance of $32,810, which is higher than budgeted, indicating an unfavorable variance.
Step-by-step explanation:
To calculate the spending variance for manufacturing overhead in March for Dubberly Corporation, we need to compare the actual overhead costs to the budgeted overhead costs based on the actual machine-hours used. First, we find the budgeted overhead costs using the provided cost formula and the actual machine-hours. The cost formula is given as $31,800 per month plus $64 per machine-hour.
Using the formula and the actual machine usage of 8,000 hours, the budgeted cost is calculated as follows:
Budgeted Overhead Cost = Fixed cost + (Variable cost per machine-hour × Actual machine-hours)
Budgeted Overhead Cost = $31,800 + ($64 × 8,000)
Budgeted Overhead Cost = $31,800 + $512,000
Budgeted Overhead Cost = $543,800
Now, to find the spending variance, we subtract the budgeted overhead cost from the actual overhead cost:
Spending Variance = Actual Overhead Cost - Budgeted Overhead Cost
Spending Variance = $576,610 - $543,800
Spending Variance = $32,810
The spending variance for manufacturing overhead in March is therefore unfavorable as it is higher than budgeted, denoted by the letter 'u' in the multiple-choice options. Hence, the closest option is:
$32,810 u