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 7,000 units, but its actual level of activity was 7,040 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:
Actual results for January:

-The activity variance for selling and administrative expenses in January would be closest to:
A) $446 U
B) $16 U
C) $446 F
D) $16 F

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, the company budgeted for 7,000 units, but its actual level of activity was 7,040 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:
  Actual results for January:
 
-The activity variance for selling and administrative expenses in January would be closest to:
A) $446 U 
B) $16 U 
C) $446 F 
D) $16 F

Quizplus · Accepted Answer

11ea7761_1775_7c7e_81a5_3b6eb8bc07a1_TB2580_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

Neeb Corporation Manufactures and Sells a Single Product