Goedl Car Detailing does various auto cleaning and detailing services in Cincinn

Question

Goedl Car Detailing does various auto cleaning and detailing services in Cincinnati, Ohio. The cost formula for its materials and supplies is $2,050 per month plus $11 per vehicle. For the month of November, the company planned for activity of 85 vehicles, but the actual level of activity was 45 vehicles. The actual materials and supplies for the month was $2,880.

The spending variance for materials and supplies in November would be closest to:

$105 F

$335 U

$335 F

$105 U

Goedl Car Detailing does various auto cleaning and detailing services in Cincinnati, Ohio. The cost formula for its materials and supplies is $2,050 per month plus $11 per vehicle. For the month of November, the company planned for activity of 85 vehicles, but the actual level of activity was 45 vehicles. The actual materials and supplies for the month was $2,880.

Explanation / Answer

Standard cost of cleaning 45 vehicles = 2050+ 45 *11 = 2545

Actual cost of materials and supplies = 2880

Spending variance = Standard cost - Actual cost

= 2545 - 2880 = 335 Unfavourable

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