Wayland Corporation's static planning budget for April appears below. The company bases its budgets on machine-hours. In April, the actual number of machine-hours was 6,600, the actual supplies cost was $64,040, the actual power cost was $7,070, the actual salaries cost was $88,300, and the actual equipment depreciation was $7,430.
-The spending variance for supplies cost in the flexible budget performance report for the month should be:
A)$5,540 F
B)$4,640 U
C)$4,640 F
D)$5,540 U

Question

Wayland Corporation's static planning budget for April appears below. The company bases its budgets on machine-hours.  In April, the actual number of machine-hours was 6,600, the actual supplies cost was $64,040, the actual power cost was $7,070, the actual salaries cost was $88,300, and the actual equipment depreciation was $7,430.
-The spending variance for supplies cost in the flexible budget performance report for the month should be:
A)$5,540 F 
B)$4,640 U 
C)$4,640 F 
D)$5,540 U

Quizplus · Accepted Answer

The spending variance is calculated as the difference between the actual cost and the flexible budget cost. In this case, the actual cost is $10,180 and the flexible budget cost is $5,540. Therefore, the spending variance is $10,180 - $5,540 = $4,640 U.

Wayland Corporation's Static Planning Budget for April Appears Below