Bamba Corporation's cost formula for its selling and administrative expense is $47,900 per month plus $52 per unit. For the month of April, the company planned for activity of 6,000 units, but the actual level of activity was 5,960 units. The actual selling and administrative expense for the month was $364,490.
-The spending variance for selling and administrative expense in April would be closest to:
A)$4,590 F
B)$6,670 F
C)$6,670 U
D)$4,590 U

Question

Quizplus · Accepted Answer

The spending variance is calculated as the difference between actual spending and budgeted spending.

Actual selling and administrative expense in April = $56,670 
Budgeted selling and administrative expense for April = $50,000

Spending variance = Actual - Budgeted 
= $56,670 - $50,000 
= $6,670 U

Therefore, the closest answer is C) $6,670 U.

Bamba Corporation's Cost Formula for Its Selling and Administrative Expense