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lorasvet [3.4K]
2 years ago
6

Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and

performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:

Fixed element per month Variable element per unit
Revenue - $ 39.60
Direct labor $ 0 $ 5.50
Direct materials 0 15.70
Manufacturing overhead 41,500 1.30
Selling and administrative expenses 22,700 0.20
Total expenses $ 64,200 $ 22.70
Actual results for May:

Revenue $ 197,810
Direct labor $ 28,565
Direct materials $ 80,265
Manufacturing overhead $ 47,905
Selling and administrative expenses $ 22,680
The revenue variance for May would be closest to:
Business
1 answer:
Bond [772]2 years ago
5 0

Answer:

2170U

See the explaination for the details of the answer.

Explanation:

Revenue variance= Actual quantity shipped × (standard price per unit - actual price per unit)

Or

AQ×SP - AQ×AP

= (5050×39.60) - 197810

= 199980 - 197810

= 2170 Unfavourable

An Unfavourable revenue variance because the actual revenue is less than what is anticipated.

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