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Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 7,200 units, but its actual level of activity was 7,150 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:

$68,000

$22.80     

Fixed element
per month Variable
element per tenant-day   Revenue %u2014 $34.70        Direct labor $0 $6.70        Direct materials 0 13.20        Manufacturing overhead 42,000 2.20        Selling and administrative expenses 26,000 0.70        Total expenses

$68,000

$22.80     

Explanation / Answer

Hi,

Please find the answer as follows:

Revenue Variance = Actual Revenue - Actual Activity*Standard Revenue = 249300 - 7150*34.70 = 1195 (F)

Option C is correct.

Thanks.

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