Question

Petrus Framing's cost formula for its supplies cost is $1,920 per month plus $11 per frame. For the month of March, the company planned for activity of 632 frames, but the actual level of activity was 639 frames. The actual supplies cost for the month was $9,340. The activity variance for supplies cost in March would be closest to:

Answer 1

Answer:

Total variance= 391 unfavorable

Explanation:

Giving the following information:

Petrus Framing's cost formula for its supplies cost is $1,920 per month plus $11 per frame. For March, the company planned for activity of 632 frames, but the actual level of activity was 639 frames. The actual supplies cost for the month was $9,340.

Estimated= 1,920 + 639*11= 8,949

Real= 9,340

Total variance= real - estimated

Total variance= 9,340 - 8,949= 391 unfavorable