Rients Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for October.

	Fixed Element per Month			Variable Element per Customer Served		Actual Total for October
Revenue				$	4,100	$	182,900
Employee salaries and wages	$	42,300		$	1,300	$	98,800
Travel expenses				$	700	$	30,500
Other expenses	$	31,500				$	31,900

When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October.

The spending variance for Travel expenses for October would have been closest to:

Multiple Choice

• $300 F

• $300 U

• $3,200 F

• $3,200 U

1 B) Rients Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,900 units, but its actual level of activity was 6,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:

Data used in budgeting:

	Fixed element per month			Variable element per unit
Revenue		-		$	32.10
Direct labor	$	0		$	5.00
Direct materials		0			13.60
Manufacturing overhead		31,500			1.20
Selling and administrative expenses		23,700			0.70
Total expenses	$	55,200		$	20.50

Actual results for June:

Revenue	$	219,604
Direct labor	$	34,990
Direct materials	$	94,364
Manufacturing overhead	$	39,668
Selling and administrative expenses	$	29,888

The spending variance for direct materials in June would be closest to:

Multiple Choice

• $524 F

• $20 F

• $20 U

• $524 U