Clark company’s master budget includes $360,000 for equipment depreciation. the master budget was prepared for an annual volume of 120,000 chargeable hours. this volume is expected to occur uniformly throughout the year. during september, clark performed 9,000 chargeable hours and recorded $28,000 of depreciation. required: 1. determine the flexible-budget amount for equipment depreciation in september.2. compute the spending variance for the depreciation on equipment. was the variance favorable (f) or unfavorable (u)? 3. calculate the fixed overhead production volume variance for depreciation expense in september. was this variance favorable (f) or unfavorable (u)?

(1) $30,000

(2) $2,000 Favorable

(3) $3,000 Unfavorable

Explanation:

Planned production in September:

= Annual volume ÷ 12 months

= 120,000 ÷ 12

= 10,000 chargeable hours

Standard depreciation per charageable hour:

= master budget for equipment depreciation ÷ Annual volume

= 360,000 ÷ 120,000

= $3

(1) Flexible-budget amount for equipment depreciation in September:

= (master budget for equipment depreciation ÷ Annual volume) × Planned production in September

= (360,000 ÷ 120,000) × 10,000

= $30,000

(2) Spending variance for the depreciation on equipment:

= Actual depreciation for the month - Flexible-budget amount for equipment depreciation

= $28,000 - $30,000

= $2,000 Favorable

(3) Fixed overhead production volume variance for depreciation expense:

= Budgeted depreciation for the month - Total standard depreciation applied

= $30,000 - (9,000 × 3)

= $30,000 - $27,000

= $3,000 Unfavorable

it is d i just took the test

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.