Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May,
Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,130 units, but its actual level of activity was 5,080 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:
| Fixed element per month | Variable element per unit | ||||
| Revenue | - | $ | 39.90 | ||
| Direct labor | $ | 0 | $ | 5.80 | |
| Direct materials | 0 | 16.00 | |||
| Manufacturing overhead | 41,800 | 1.60 | |||
| Selling and administrative expenses | 23,000 | 0.50 | |||
| Total expenses | $ | 64,800 | $ | 23.90 | |
Actual results for May:
| Revenue | $ | 198,110 |
| Direct labor | $ | 28,865 |
| Direct materials | $ | 80,565 |
| Manufacturing overhead | $ | 49,405 |
| Selling and administrative expenses | $ | 22,980 |
The spending variance for manufacturing overhead in May would be closest to:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started