Isometric Foundation Materials Company is calculating the variable overhead spending variance due to a difference in the actual variable overhead cost per unit of their cost per unit allocation base and the budgeted variable overhead cost per unit. Operational management had budgeted for a $65 variable overhead cost per unit but now find that the actual cost per unit of the allocation base is $60 per unit. The actual quantity of machine hours used was 5,500.

Required

Compute the variable overhead spending for IFMC and indicate whether it is a favorable, F, or unfavorable, U, variance.

A. $27,500 U

B. $17,500 U

C. $17,500 F

D. $7,500 F

E. $27,500 F