Apples, Inc. uses a predetermined factory overhead rate based on machine hours. For the month of May, Apples budgeted overhead was $400000 (Variable $250000; Fixed $150000) based on an estimated volume of 100000 machine hours. Actual overhead amounted to $440000 with actual machine hours totaling 108000. What was the spending variance?

Select one:

a.

$20000 unfavourable

b.

$40000 unfavourable

c.

$20000 favourable

d.

$8000 unfavourable