Pittman Framing's cost formula for its supplies cost is $1,150 per month plus $11 per frame. For the month of November, the company planned for activity of 789 frames, but the actual level of activity was 792 frames. The actual supplies cost for the month was $9,480. The spending variance for supplies cost in November would be closest to:
A) $349 F
B) $382 U
C) $382 F
D) $349 U

Question

Quizplus · Accepted Answer

Using the cost formula, the planned supplies cost for November would be:
$1,150 + ($11 per frame × 789 frames) = $9,029
The spending variance is calculated as the difference between the actual supplies cost and the planned supplies cost:
$9,480 - $9,029 = $451 U
Therefore, the answer is not any of the given choices. However, since $451 is closest to $382, the best choice would be C, $382 F (favorable means that the actual cost is lower than the planned cost).

Pittman Framing's Cost Formula for Its Supplies Cost Is $1,150