e Book Teaching R... Mitchell Community Col Pricelne.comAel WU Saved Piechocki C

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e Book Teaching R... Mitchell Community Col Pricelne.comAel WU Saved Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its acual results for May: Help Save&Exit; Data used in budgeting: Fixed element Variable element per month r unit s 32.60 $3.90 1.80 Revenue Direct labor Direct materials Manufacturing overhead 33, 400 Next K Prev6 of 10

Explanation / Answer

Standard Actual Particulars Qty Rate amount Qty Rate amount Materials               5,900.00                     12.10            71,390.00               5,940.00                    12.4283             73,824.00 Actual output               5,940.00 Materials reqd (125000*1.7)            71,874.00 Direct Material Spending Variance = (Actual price - Standard Price)*No of units purchased Direct Material Spending Variance =(12.4283 - 12.10)*5940 Direct Material Spending Variance =(.3283)*5940 Direct Material Spending Variance =1,950 U

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