Brong Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March.
When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March.
-The spending variance for total expenses for March would have been closest to:
A) $5,300 U
B) $300 F
C) $5,300 F
D) $300 U

Question

Brong Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March.
  When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March.
-The spending variance for total expenses for March would have been closest to:
A) $5,300 U 
B) $300 F 
C) $5,300 F 
D) $300 U

Quizplus · Accepted Answer

The spending variance is calculated by comparing actual expenses to budgeted expenses. A $300 unfavorable (U) variance indicates that actual expenses were $300 higher than budgeted.

Brong Corporation Is a Shipping Container Refurbishment Company That Measures