Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
Actual results for June:

-The overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for June would be closest to:
A) $9,256 U
B) $9,256 F
C) $9,780 U
D) $9,780 F

Question

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
  Actual results for June:
 
-The overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for June would be closest to:
A) $9,256 U 
B) $9,256 F 
C) $9,780 U 
D) $9,780 F

Quizplus · Accepted Answer

11ea7761_1771_f9fe_81a5_6fcfb6bdb22a_TB2580_00 11ea7761_1772_210f_81a5_a592fcd1afb8_TB2580_00 Because the actual net operating income is greater than the flexible budget, the variance is favorable (F).

Trevorrow Corporation Manufactures and Sells a Single Product