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QveST [7]
3 years ago
15

etrus Framing's cost formula for its supplies cost is $1,760 per month plus $10 per frame. For the month of March, the company p

lanned for activity of 616 frames, but the actual level of activity was 624 frames. The actual supplies cost for the month was $8,420. The activity variance for supplies cost in March would be closest to:
Business
1 answer:
IrinaK [193]3 years ago
3 0

Answer:

$80 U

Explanation:

Flexible budget [$1,760 + ($10 × 624)]

$1,760+$6,240= $8,000

Planning budget [$1,760 + ($10 × 616)]

$1,760+$6,160= $7,920

Flexible budget-Planning budget= Activity variance

$8,000-$7,920=$80

Activity variance $80 U

Therefore the flexible budget is greater than the planning budget, the variance is unfavorable (U)

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