Schlick Framing's cost formula for its supplies cost is $1,770 per month plus $12 per frame.For the month of August,the company planned for activity of 628 frames,but the actual level of activity was 631 frames.The actual supplies cost for the month was $9,790.The activity variance for supplies cost in August would be closest to:
A)$36 F
B)$484 F
C)$484 U
D)$36 U

Question

Quizplus · Accepted Answer

The activity variance is calculated as the difference between the flexible budget cost and the planning budget cost. The flexible budget cost for 631 frames is $1,770 + ($12 * 631) = $9,342. The planning budget cost for 628 frames is $1,770 + ($12 * 628) = $9,306. The activity variance is $9,342 - $9,306 = $36 U (Unfavorable).

Schlick Framing's Cost Formula for Its Supplies Cost Is $1,770