Manter 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 6,900 units, but its actual level of activity was 6,940 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 spending variance for direct materials in June would be closest to:
A) $524 F
B) $20 F
C) $20 U
D) $524 U

Question

Manter 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 6,900 units, but its actual level of activity was 6,940 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 spending variance for direct materials in June would be closest to:
A) $524 F 
B) $20 F 
C) $20 U 
D) $524 U

Quizplus · Accepted Answer

11ea7761_1774_b92b_81a5_a79bb06f2c08_TB2580_00 Because the actual expense is less than the flexible budget, the variance is favorable (F).

Manter Corporation Manufactures and Sells a Single Product