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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

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