Homework Answers
| Ans. 10 | Option E | |||
| Explanation: Actual costs should be compared to flexible budget which is prepared on the actual | ||||
| level of activity. | ||||
| Revenue and spending variance is the difference between actual results and flexible budget. | ||||
| Fixed cost always remains constant, but it should be included in a flexible budget. | ||||
| Ans. 11 | Option D $5,600 | |||
| Unfavorable spending variance for utilities means actual utilities expenses are higher than the | ||||
| utilities expenses of flexible budget. | ||||
| Flexible budget for utilities = Actual units produced * Utilities cost per unit | ||||
| 8,000 * $0.60 = $4,800 | ||||
| Unfavorable spending variance = Actual utilities - Flexible utilities | ||||
| $800 = Actual utilities - $4,800 | ||||
| Actual utilities = $4,800 + $800 | ||||
| Actual utilities = $5,600 | ||||
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10 Which of the following statements is true? activity is higher than expected total fixed costs...
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