Linscott Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The spending variance for direct materials in July would be closest to:
A)$2,570 U
B)$2,796 U
C)$2,796 F
D)$2,570 F

Question

Linscott Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting:  Actual results for July:  The spending variance for direct materials in July would be closest to:
A)$2,570 U 
B)$2,796 U 
C)$2,796 F 
D)$2,570 F

Quizplus · Accepted Answer

The Answer of Linscott Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting:  Actual results for July:  The spending variance for direct materials in July would be closest to:
A)$2,570 U 
B)$2,796 U 
C)$2,796 F 
D)$2,570 F

Linscott Corporation Manufactures and Sells a Single Product