Question

Revise the data in your worksheet to reflect the results for the subsequent period as shown below:

a. What is the activity variance for revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

b. What is the spending variance for the cost of ingredients? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

c. What is spending variance for wages and salaries? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

d. What is spending variance for total expenses? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

1 Chapter 9: Applying Excel 3 4 $ $ 16.50 a 6.25 9 6 Data Revenue Cost of ingredients Wages and salaries Utilities Rent Miscellaneous 7 $ 0.20 4 $ $ $ $ 10,400 800 2,200 600 8 9 10 + $ 0.809 11 Actual results: 12 Revenue 13 Cost of ingredients 14 Wages and salaries 15 Utilities 16 Rent 17 Miscellaneous 18 19 Planning budget activity 20 Actual activity $ $ $ $ $ $ 29,965 11,025 10,260 1,180 2,200 2,035 1,700 meals served 1,800 meals served

Answer 1

Answer-a)- The “activity variance” for revenue is =$1650 F.

Explanation- Activity variance for revenue = Planning budget- Flexible budget

= (1700 meals served*$16.50 per meals served) - (1800 meals served*$16.50 per meals served)

= $28050- $29700

= $1650 F

b)- The “Spending variance” for cost of ingredients is =$225 F.

Explanation- Spending variance for cost of ingredients = Flexible budget- Actual results

= (1800 meals served*$6.25 per meals served) - $11025

= $11250- $11025

= $225 F.

c)- The “Spending variance” for wages & salaries is =$140 F.

Explanation- Spending variance for wages & salaries = Flexible budget- Actual results

= $10400- $10260

= $140 F.

d)- The “Spending variance” for total expenses is =$350 F.

Explanation-

Spending Variances
For the month ended
Particulars		Flexible Budget	Actual Results	Variances	Remark
		$	$	$
Cost of ingredients	(1800 meals served*$6.25 per meal)	11250	11025	225	Favorable
Wages & salaries		10400	10260	140	Favorable
Utilities	(1800 meals served*$0.20 per meal)+$800	1160	1180	-20	Unfavorable
Rent		2200	2200	0	None
Miscellaneous	(1800 meals served*$0.80 per meal)+$600	2040	2035	5	Favorable
Total expenses		27050	26700	350	Favorable