Aultz Tfe Installation Corporation measures its activity in terms of square feet

Question

Aultz Tfe Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1180 square feet and the actual level of activity was 1270 square feet. The company's owner budgets for supply costs, a variable cost, at $3.50 per square foot. The actual supply cost last month was $4,980. In the company's flexible budget performance report for last month, what would have been the spending variance for supply costs? Multiple Choice $850 U $535 U 5315 U $353 U

Explanation / Answer

Spending variance = Flexible budget cost-actual cost

= (1270*3.50)-4980

Spending variance = 535 U

So answer is b) $535 U

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