Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting:
Fixed element per month | Variable element per unit | ||||
Revenue | - | $ | 34.00 | ||
Direct labor | $ | 0 | $ | 7.20 | |
Direct materials | 0 | 12.00 | |||
Manufacturing overhead | 40,500 | 1.30 | |||
Selling and administrative expenses | 23,200 | 0.40 | |||
Total expenses | $ | 63,700 | $ | 20.90 | |
The activity variance for selling and administrative expenses in March would be closest to:
Multiple Choice
$12 U
$12 F
$38 U
$38 F
Activity variance = Budgeted - Flexible = [23,200+(0.40*6700)] - [23,200+(0.40*6670)] = 25,880 - 25,868 = 12 F |
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Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of...
Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6.700 units, but its actual level of activity was 6.670 units. The company has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per unit $34.00 Revenue $ Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses 7.20...
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