Question

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours 1,000 Supplies (@ $8.60 per machine-hour) $ 8,600 Power (@ $8.80 per machine-hour) 8,800 Salaries 11,300 Equipment depreciation 9,900 Total $ 38,600 Actual results for the month were: Actual number of machine-hours 1,200 Supplies $ 10,290 Power $ 10,860 Salaries $ 11,690 Equipment depreciation $ 9,990 The spending variance for supplies costs in the flexible budget performance report for the month should be: Multiple Choice $30 F $1,690 F $1,690 U $30 U

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours 1,000 Supplies (@ $8.60 per machine-hour) $ 8,600

Actual results for the month were: Actual number of machine-hours 1,200 Supplies $ 10,290

Manufacturing overhead spending variance= (standard rate - actual rate)* actual quantity

Manufacturing overhead spending variance= (8.60 - 8.575)*1,200=  30 favorable