Flexible Budget and Variances for Depreciation Somson SuperKlean Service’s master budget includes $258,000 for equipment depreciation. The master budget was prepared for an annual vol- ume of 103,200 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Somson performed 8,170 chargeable hours, and the firm recorded $20,500 of depreciation expense. Required
Determine the flexible-budget amount for equipment depreciation in September.
Compute the spending variance for the depreciation expense on equipment.
Calculate the production-volume variance for the depreciation expense. What is the interpretation of this variance?
List possible reasons for the spending variance.