Albers Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 7,600 units, but its actual level of activity was 7,570 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:

Data used in budgeting:
Actual results for April:
-The activity variance for selling and administrative expenses in April would be closest to:
A)$15 F
B)$645 F
C)$15 U
D)$645 U

Question

Albers Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 7,600 units, but its actual level of activity was 7,570 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:

Data used in budgeting:

Actual results for April:

-The activity variance for selling and administrative expenses in April would be closest to:

Data used in budgeting:
  Actual results for April: 
-The activity variance for selling and administrative expenses in April would be closest to:
A)$15 F 
B)$645 F 
C)$15 U 
D)$645 U

Quizplus · Accepted Answer

The activity variance is calculated as the difference between the actual cost and the budgeted cost, multiplied by the actual activity level. In this case, the actual cost is $660, the budgeted cost is $645, and the actual activity level is 100%. Therefore, the activity variance is ($660 - $645) * 100% = $15 F.

Albers Corporation Manufactures and Sells a Single Product