Question
Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January,
Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 7,110 units, but its actual level of activity was 7,260 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Fixed element per month | Variable element per unit | ||||
Revenue | - | $ | 28.30 | ||
Direct labor | $ | 0 | $ | 4.30 | |
Direct materials | 0 | 10.80 | |||
Manufacturing overhead | 45,400 | 2.20 | |||
Selling and administrative expenses | 16,000 | 0.60 | |||
Total expenses | $ | 61,400 | $ | 17.90 | |
Actual results for January:
Revenue | $ | 184,548 |
Direct labor | $ | 24,278 |
Direct materials | $ | 69,908 |
Manufacturing overhead | $ | 50,884 |
Selling and administrative expenses | $ | 20,846 |
The activity variance for selling and administrative expenses in January would be closest to:
Multiple Choice
-
$580 U
-
$90 U
-
$580 F
-
$90 F
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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