Privett Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below:

Actual results for the month were:

-The spending variance for occupancy costs in the flexible budget performance report for the month is:
A)$160 U
B)$940 U
C)$940 F
D)$160 F

Question

Privett Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below:

Actual results for the month were:

-The spending variance for occupancy costs in the flexible budget performance report for the month is:
A)$160 U 
B)$940 U 
C)$940 F 
D)$160 F

Quizplus · Accepted Answer

The spending variance is calculated as the difference between the actual costs and the flexible budget costs. A variance of $940 U (unfavorable) indicates that the actual occupancy costs were $940 higher than the budgeted costs.

Privett Hospital Bases Its Budgets on Patient-Visits