Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The activity variance for direct labor in March would be closest to:
A) $2,406 U
B) $216 U
C) $216 F
D) $2,406 F

Question

Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting:
 
-The activity variance for direct labor in March would be closest to:
A) $2,406 U 
B) $216 U 
C) $216 F 
D) $2,406 F

Quizplus · Accepted Answer

11ea7761_1779_e965_81a5_ef83e2a04cc6_TB2580_00 Because the flexible budget is less than the planning budget, the variance is favorable (F).

Rogstad Corporation Manufactures and Sells a Single Product