Question

Skoff Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. Fixed Variable Element per Element per Container A ctual Total Month Refurbished for March $ 4,000 $ 130,000 $ 42,700 $ 1,000 $ 75,600 Revenue Employee salaries and wages Refurbishing materials Other expenses 600 $ $ 18,800 38,400 $ 37,900 When the company prepared its planning budget at the beginning of March, it assumed that 35 containers would have been refurbished. However, 32 containers were actually refurbished during March. The spending variance for "Refurbishing materials" for March would have been closest to: Multiple Choice $2,200 u O S400F

Answer 1

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Skoff Corporation
Spending Variance	Finished Units	Rate per unit	Amount $
Cost at Standard Rate	32.00	600.00	19,200.00	A
Actual Cost			18,800.00	B
Spending variance (A-B)			400.00	Favorable