Vandall Corporation manufactures and sells a single product. The company uses un
ID: 2442990 • Letter: V
Question
Vandall Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:Data used in budgeting:
Fixed element Variable element
per month per unit
Revenue ___-___ $35.40
Direct labor 0 $3.30
Direct materials 0 15.90
Manufacturing overhead 49,260 1.20
Selling and
administrative expenses 26,600 0.10
Total expenses $75,800 $20.50
Actual results
for April:
Revenue $254,146
Direct labor $24,722
Direct materials $116,496
Manufacturing overhead $59,608
Selling and
administrative expenses $26,494
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for April would be closest to
A. $6,740 U.
B. $6,740 F.
C. $6,144 F.
D. $6,144 U.
Explanation / Answer
Variance = 26826 - 32970 = -6144
D.$6144 unfavourable
Flexible Budget Units 7340 Per Unit 7300 Per Unit Revenue 254146 34.6248 258420 35.4 less:Direct labor 24722 3.36812 24090 3.3 Direct materials 116496 15.87139 116070 15.9 Manufacturing overhead 59608 8.120981 57960 (49,200 + 1.20) Selling and administrative exp 26494 3.609537 27330 26,600 + 0.10 26826 32970Related Questions
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