Question

Photo Framing's cost formula for its supplies cost is $1,090 per month plus $19 per frame. For the month of November, the company planned for activity of 619 frames, but the actual level of activity was 609 frames. The actual supplies cost for the month was $13,050. The spending variance for supplies cost in November would be closest to:

Answer 1

Answer:

Spending Variance    $389   Unfavorable

Explanation:

The spending variance is the difference between the standard cost allowed for the actual level of activity and the actual cost incurred.

                                                                              $

Standard allowance ($19× 609) + 1090         12,661    

Actual cost                                                        13,050

Spending Variance                                            389   Unfavorable

Answer 2

Answer:

$389 U

Explanation:

Photo Framing's

Actual result $13,050

Less Flexible budget

($1,090+$11,571) $12,661

(Supplies cost is $1,090

+ $19 per frame ×actual level of activity

609 frame)

Spending variance $389 U

Therefore the spending variance for supplies cost in November would be closest to: $389 U