13 Eats for Kids is an organization that provides lunches to children in the sum

Question

13 Eats for Kids is an organization that provides lunches to children in the summer when they are out of school. For the most recent month of Kitchen Operations, the organization reported the following Fixed Cost per month Variable Cost per meal Budget for Kitchen Operations 1.75 3,900 meals Budget number of meals Actual Kitchen Operations Expenses 11,010 3,400 meals Actual number of meals Spending Variance for Kitchen Operations Given the reported variance, the organization's budgeted fixed cost per month would be closest to: S 660 Favorable A. S3,525 S 4,400 4,845 D. 5,720 E. None of the above 14 Which of the following statements is falss? A. Flexible budgets can be used when there is more than one cost driver B. The fixed component of a budget for a cost has no effect on its activity variance C. If actual activity exceeds budgeted activity, the activity variance foer an expense will always be unfavorable To understand performmance better, actual results should be compared to the flexible budget is a favorable spending variance, actual activity must be less that budgeted activity 6o u ler Act 900 3400 earch Prtscn 8

Explanation / Answer

Question - 13

Here actual expenses = 11010

It was given that favorable variance = 660, which implies that Budget expenses are higher than actual.

So total budgeted expenses = 11010 + 660 = 11670

Out of this Actual variable expenses = 3400 * 1.75 = 5950

Fixed budgeted expenses = 11670 - 5950 = 5720 . ..... Option - D

Question - 14

Option - E is false

When there is favorable spending variance, it implies that, actual rate of overhead paid is lower than standard rate of overhead per hour. So spending vaiance does not depend on activity.

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