Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting:
Actual results for October:
The activity variance for net operating income in October would be closest to:

Question

Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting:
 Actual results for October:
 The activity variance for net operating income in October would be closest to:

Quizplus · Accepted Answer

11eacbfc_c5a7_6323_8ffe_a1b4d8925ea2_TB7552_00 11eacbfc_c5a7_8a34_8ffe_6d3cc41d2e00_TB7552_00 Because the flexible budget net operating income is less than the planning budget, the variance is unfavorable (U).

Feemster Corporation Manufactures and Sells a Single Product