Question

Skoff Corporation is a shipping container refurbishment company that measures ns output by the number of containers refurbshed, The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operabions for March Variable Fixed Element per Actual Element Container Total for par Month tefurbished March $4,000 Revenue $130,000 $75,600 Enployee salaries and wages Refurbishing materials $42,780 $1,0a0 $ 600 s18,800 Other expenses $37,900 $38,400 When the compeny prepared its planning budget at the beginning of March, it assumed that 35 containers would have been seturbished However, 32 containers were actually refurbished during March The spending vanance for "Refabishing materials for March would have been closest to Multiple Choice S400F 5400 U $2.200 F

Answer 1

Answer- The spending variance for ‘Refurbishing materials’ for March would have been closest to =$400 F.

Explanation- Spending variance for ‘Refurbishing materials = Flexible budget –Actual costs

= (32 containers*$600 per container refurbished)- $18800

= $19200-$18800

= $400 Favorable